Energy Is Our Business

Energy is our business

Annual Report 2008

Alpiq Holding Ltd. (formerly Atel Holding Ltd) Bahnhofquai 12 CH-4601 Olten Tel. +41 62 286 71 11 Fax +41 62 286 73 73 www.alpiq.com Atel Group Annual Report 2008 As a leading energy services provider operating throughout Europe, Atel generates, trades and sells electricity, and also provides a broad range of energy services cov- ering all aspects of energy and its applications.

Subsidiaries and branches Energy segment Energy Services segment Power generation Electricity sales and trading (exchanges / OTC market) As a leading energy services provider operating throughout Europe, Atel generates, trades and sells electricity, and also provides a broad range of energy services cov- ering all aspects of energy and its applications.

Subsidiaries and branches Energy segment Energy Services segment Power generation Electricity sales and trading (exchanges / OTC market) Mission Statement

Atel is an energy company that is active throughout Europe with strong roots in Switzer- land. Energy has been Atel’s core business for more than 110 years. Its activities in the ﬁ eld of power generation, trading, sales and energy services are supported by pan-European partnerships built on mutual trust. Atel acts with social responsibility, ever-mindful of the needs of customers, shareholders, employees and the community alike. 2

Key Figures 2008

Atel Group + / – variance 2007 – 2008 in % 2007 2008 2007 2008 (based on CHF) CHF million CHF million EUR million EUR million

Energy sales (TWh) – 25.2 128.841 96.328 128.841 96.328

Net revenue – 4.1 13 452 12 897 8 187 8 127

Energy – 6.9 11 505 10 712 7 002 6 750

Energy Services 14.4 1 959 2 242 1 192 1 413 Earnings before interest, tax, depreciation and amortisation (EBITDA) 2.2 1 253 1 281 763 807

Depreciation – 12.9 – 248 – 280 – 151 – 176

Earnings before interest and tax (EBIT) – 0.4 1 005 1 001 612 631

as % of net revenue 7.5 7.8 7.5 7.8

Group profit – 5.8 778 733 474 462

as % of net revenue 5.8 5.7 5.8 5.7

Net investments 77.7 591 1 050 360 662

Total equity 5.8 3 621 3 830 2 188 2 579

as % of total assets 38.6 36.2 38.6 36.2

Total assets 12.6 9 381 10 566 5 668 7 115

Employees* 10.1 9 034 9 944 9 034 9 944 plus trading in standardised products

in TWh – 35.9 220.115 141.191 220.115 141.191

in CHF million or EUR million – 26.8 15 885 11 627 9 668 7 326 * Average number of full-time equivalent employees

Per share information + / – variance 2007 2008 2007 – 2008 in % CHF CHF

Nominal value 20 10

Share price at 31.12. – 11.6 605 535

High 26.4 605 765

Low 1.3 371 376

Net profit – 10.5 38 34

Dividend* – 10

Reduction of nominal value 10 – * Proposal to the Annual General Meeting of 23 April 2009 3

Contents

10 Foreword 12 Interview with the CEO 22 Milestones

34 Energy Segment 58 Energy Services Segment

72 Corporate Social Responsibility 76 Corporate Governance 90 Addresses and Financial Calendar 92 Acknowledgements

Financial Report (separate section) 4

Weinfelden, Switzerland

Having undergone canalisation followed by natural more than 200 beavers, whose industrious building of regeneration, the River Thur is once more accessible to canals and dams clears groves, letting in more sunlight the public and to the local fauna, and offers adequate and in so doing helping to promote biodiversity. This is protection against fl ooding. A broad course, well- also Atel’s aim. Through Atel EcoPower, the company wooded banks – some steep, some fl at – and a variety has a stake in Wasserkraftwerke Weinfelden AG, which of changing currents and natural gravel beds combine operates the three small hydroelectric power stations of to create a landscape that is rich in diversity, where not Widen, Model and Mühle on the Thur Canal, harnessing only the number of wading birds has increased, but the waters of what was once a wild stream to generate also the former riparian forests are enjoying a new around 10 GWh of electricity per year: enough to meet lease of life. And even the beaver, which only two cen- the power requirements of 3,000 households. Three turies ago was extinct in Switzerland, feels at home more small hydroelectric stations that Atel plans to in Thurgau once again. The area surrounding the Thur build on the Thur will supply another 1,000 households Canal and its tributaries now provides a habitat for with electricity. The Thur Canal next to Widen power station provides a rest and recreation area for humans and a habitat for animals. While the natural riverbank lets aquatic animals move easily to dry land ahead of the power station, a fauna passage allows land animals to safely cross the canal. Wherever the beaver is at work, fl ora and fauna fl ourish. This shy rodent helps to keep the ecosystem intact in riparian landscapes, but feels at home only if the rivers and streams it inhabits have suffi cient water at all times. For this reason, a residual water pipe was also installed next to Widen power station.

During maintenance work on the tributaries of the Thur, all fi sh are caught and released back into the river. Water offi cer Hanspeter Zwahlen (right), who is responsible for maintenance at the three power stations, helps cantonal fi sheries offi cer Markus Grünenfelder with the “electrical catch”. The Thur weir has potential for expansion: at present, two cubic metres of residual water fl ow through here every second. A weir power station could use this to generate around three GWh of electricity per year. 10

Dear Shareholder,

were caught up in this trend as the price of crude oil plummeted from an all-time high of more than 140 dollars in July to less than 50 dollars (down to the 2004 level) at the year end.

While Atel’s results for the year are slightly below expect ation as a consequence of this changed situation, they nevertheless remain close to the high level recorded in the previous year. So, all things considered, the results are highly satisfactory and we are duly proud of them. The prospect of sustained long-term growth, albeit at a slower pace, remains intact. On behalf of the Board of Directors, I would like to thank the Executive Board under CEO Giovanni Leonardi and the 10,000-plus employees at Atel for their daily dedication and valuable contribution to our company and all the values it embodies.

In my letter to you in last year’s Annual Report, I wrote: For years, Atel’s business performance has been on the “Climate, shortages and competition were the core rise, driven by growth in revenue, profi t and sharehold- issues dominating the year under review. These three er value, as well as satisfi ed customers, shareholders and issues also dictate the boundary conditions for Atel’s employees. This gratifying trend is the result of a care- development over the next few years.” Does this still fully crafted business policy and forward-looking corpor- hold true against the changed backdrop of an emerging ate decisions. But a particularly favourable operating slowdown in economic growth? I believe it does. environment, marked by rising affl uence, increasing demand for energy and booming markets, has also played Climate: climate is subject to longer cycles than the its part. Unfortunately, however, this paradise was short- economy. Hence the long-term trend towards rising lived, and in 2008 fi nancial and economic conditions greenhouse gas emissions remains unaffected by short- took a marked turn for the worse, as massive profi ts term fi nancial and economic cycles. Fossil-fuel-based turned into severe losses overnight and banks turned to generation of electricity accounts for a not insignifi cant the state for bailouts. Around the world, rescue pack- share of CO2 emissions, and there is still a need for ac- ages costing thousands of billions of francs were put to- tion in this area. But now, climate policy – which a year gether. Inevitably, energy and raw materials markets ago was still the main engine driving global politics – is 11 Interview Segments Foreword Milestones Responsibility Addresses and Corporate Social Social Corporate Financial Calendar Corporate Governance Corporate

increasingly having to jostle for position with fi nancial Competition: liberalisation has paved the way for a com- and economic policy priorities. As a result, ambitious petitive electricity market throughout Europe. But climate objectives risk lagging even further behind the hopes that this would result in cheap electricity prices actual trend in greenhouse gas emissions. This is bad have not been fulfi lled. On the contrary, the new regu- news not only for the climate, but also for the credibil- lations have driven electricity prices up, also prompting ity of policymakers, who must strive to do more than political intervention here in Switzerland. But now, merely salve a bad conscience. Hence the electricity there are hopeful indications that legislative volatility industry’s responsibility and commitment towards peo- can be constrained, and that politicians and business ple and the climate is more important than ever. Mind- leaders will join forces to keep electricity prices down ful of this, Atel stepped up its investments in renewable without compromising the fundamental principles of a energies again during the year and founded Atel Eco free electricity market. Atel is interested in constructive, Services AG, reinforcing its resolve to build an even viable solutions. We are convinced that close collabor- stronger position rapidly and sustainably in the grow- ation between politicians and business leaders – a well- ing energy effi ciency market. established tradition in Switzerland – will lead to success throughout Europe. Shortages: coal, oil and gas have come down in price again, making them more cost-effective once again for The merger between Atel and EOS gained further use in generating electricity – with consequences that momentum during the year under review, with a simpli- cut both ways. The long-term prospect of electricity fi ed shareholder structure, comprehensive evaluation shortages will not change. Fossil fuel resources will of both partners and a newly defi ned organisation pav- decline rather than increase. Electricity will also remain ing the way for the defi nitive merger that took place in short supply over the long term. At the same time, at the beginning of 2009. rising demand will outstrip supply as generation and transmission capacities are gradually stretched to the The merger of Atel and EOS to create Alpiq, the new limit. There is one direct way of turning energy short- Swiss electricity group with a consolidated home base ages into energy security. The task facing all countries and an outstanding European network, marks the end is to ensure a suffi cient volume of domestically of my term as the last Chairman of the Atel Board. The produced electricity. They must have suffi cient resources disappearance of this tradition-rich company name at their disposal to meet the demand for base load and after 115 successful years brings an important chapter in peak energy reliably, cost-effectively and ecologically the history of Swiss industry to a close. But this does not on their own. Independence from electricity imports mean the end of Atel, which lives on in another form. will increase their leverage and help to keep electricity It is with a mixture of pride and sadness that I hand the prices down. keys over. I wish the new company Alpiq and my succes- sor all the best and many successful years in the service With this in mind, the Swiss Federal Council has defi ned of energy security for our country and for Europe. its energy policy priorities for Switzerland placing focus, among other things, on preserving hydroelectric power and building new large-scale power stations. In line with this, Atel has submitted a general licence application for a new nu clear power station in Niederamt and, together with the Swiss Federal Railways (SBB), is con- structing a pumped storage station in Nant de Drance. These projects will open up new horizons for us in the Rainer Schaub medium and long term. Chairman of the Board of Atel Holding Ltd 12

Giovanni Leonardi, CEO of Atel Holding Ltd (since 1 February 2009, CEO of Alpiq Holding Ltd.) 13 Foreword Segments Interview Milestones Responsibility Addresses and Corporate Social Social Corporate Financial Calendar Corporate Governance Corporate

Pole position for Alpiq

During the year, Atel forged ahead with expanding its power generation portfolio and made further important acquisitions. Following intensive preparations, the transaction agreements for the merger with EOS were signed at the year end. Together with EOS, Atel is now ideally positioned to score yet more successes as the leading Swiss energy company geared towards Europe. Giovanni Leonardi, Atel CEO, reviews the year and takes a look ahead.

Mr Leonardi, 2008 was a turbulent year for the Finally, Atel expanded its wind power portfolio by ac- economy. How did Atel do against this backdrop? quiring Vetrocom, a project company which is planning Atel achieved solid results in a challenging market envir- to build a wind farm with 20 turbines in Bulgaria. onment, thanks to good production performance and successful sales activities. The Energy Services segment What about the Energy Western Europe division? deserves special mention in this context. 2008 was a Atel is further expanding business operations in Italy record year in every respect for Atel Installationstechnik and the Nordic countries. We have, for example, pur- (AIT Group) and the GAH Group. chased a stake in energy company Moncada Energy Group S.r.l. The new joint venture, M & A Rinnovabili Group revenue was slightly down and operating profi t S.r.l., covers Moncada’s wind and solar power plants in was on a par with 2007, despite the rise in raw material Italy. In Atel, Moncada now has a strong European part- and fuel prices in the fi rst six months, followed by tur- ner for the sale of energy from renewable sources. In bulence in the fi nancial markets and fears of recession add ition, Atel acquired Energiakolmio Oy in Jyväskylä, during the second half of the year. Finland’s leading independent provider of portfolio management and energy services. And in mid-2008, How did the Central Europe division’s markets construction work began on the two gas-fi red com- fare in this increasingly challenging environment? bined cycle power stations in Bayet, France, (420 MW) We were extremely successful in the German market. and San Severo, Italy, (400 MW). The markets in the north and south also chalked up positive results. Added to this, production fi gures were out- The liberalisation of the electricity market has standing. By acquiring the Spreetal power station, Atel provoked much discussion in Switzerland. gained its fi rst generation capacities in Germany. This At the beginning of 2008, the Electricity Supply Act and com bined cycle power station with an electrical cap acity Ordinance changed the framework for the Swiss pow- of 56 MW is currently undergoing conversion and is er industry. For Atel this change involves higher costs scheduled to resume electricity generation from as and risks. So far, however, most customers with an early as the summer of 2009. Capacity at the Csepel II annual consumption volume of more than 100 MWh power station in Hungary was increased by 14 MW appear to have remained with their existing suppliers, to 403 MW. And a project is under way to upgrade the even though they are now free to choose their pro- Kladno thermal power station in the Czech Republic. vider. The price discussion remained a hot topic right 14

up to the end of the year, and will continue to domi- In June 2008, Atel suddenly announced plans nate the agenda in 2009. to build a new nuclear power station. Atel supports Swiss energy security through innovation Where does Atel stand in the electricity and investments. In line with this commitment, it sub- price debate? mitted a general licence application for a new nuclear We are working at various levels to ﬁ nd a sustainable power station in Niederamt, Solothurn. There were solution that is acceptable to all parties. The Federal several reasons behind this: ﬁ rstly, the Federal Coun- Council is already looking into proposals on ways to cil’s energy policy calls for existing nuclear power mitigate the unavoidable rise in costs. An evaluation of stations to be replaced or for new facilities to be built; the electricity grids certainly offers major potential, secondly, Switzerland is heading inexorably for an elec- since grid costs account for around one third of the tricity shortage; and thirdly, nuclear energy meets all electricity price. the federal constitution’s criteria governing energy

“Since the beginning of 2009, we at Alpiq have been supplying around one third of the Swiss population with electricity.”

Transmission grids have been hardest hit supplies: energy security, climate protection and prof- by market liberalisation. itability. Preparations for the project are ongoing. Yes, that’s right. Added to this, responsibility for oper- At the same time we are conducting negotiations with ation of the Swiss transmission grid was transferred to potential partners. Atel is aiming for a broad-based swissgrid in 2008. Atel is required by law to hand over partnership. ownership of the transmission system to swissgrid by the end of 2012. Until then, Atel Transmission Ltd. will con- What is Atel doing to protect the climate? tinue expanding its system. At the end of November In Switzerland we aim to provide 20 per cent of the in- 2008, for example, the upgraded section of the 380 kV crease in new renewable energies stipulated by the Fed- high voltage line between Lavorgo and Mettlen was put eral Council by 2030: sufﬁ cient to meet the annual elec- into operation on the Rigi. tricity requirements of more than 200,000 households. With this in mind, we are focusing on the acquisition How has production developed in Switzerland? and construction of small hydroelectric power stations One important milestone was reached when the in Switzerland. Atel EcoPower Ltd. is currently working li cences and construction permit were granted for the on around 100 projects related to renewable energies. Nant de Drance pumped storage power station in the Valais. Preparations for construction are already under We have also implemented several projects in Europe. way. 2008 saw a second groundbreaking ceremony Two wind farms in Sicily were connected to the grid in in the Valais for the Monthel combined heat and 2008, and electricity generation started at small hydropower plant. electric stations in northern Italy and Norway. 15 Foreword Segments Interview Milestones Responsibility Addresses and Corporate Social Social Corporate Financial Calendar Corporate Governance Corporate

Energy effi ciency is one of the cornerstones tion. Despite this strong volatility, Middle Offi ce & Oper- of the Federal Council’s energy policy: ations enjoyed a successful year and, following Atel’s What is Atel doing to promote this? switch to the new Murex trading system in June, Asset Demand for energy effi ciency services has risen. Atel Trading is also ideally equipped for the future. is heavily involved in this area – after all, our AIT work- force and parts of the GAH Group are specialists in What’s the focus for 2009? en ergy effi ciency. Last year, we formed Atel Eco Services In 2008, we made intensive preparations ahead of the AG, a provider of services that enhance energy effi ciency merger with EOS. The transaction agreements were in industrial plant engineering and technical facility signed on 18 December 2008, following which both the management. public and key stakeholders were immediately informed. The merger under the umbrella of the new ALPIQ brand What are the priorities for the Energy will continue to keep us busy in the current fi nancial Services segment? year, with focus mainly on the industrial and cultural The AIT Group has a high order backlog. During the year integration of the companies. under review, the Group enjoyed further growth, with acquisitions in Italy, the Swiss plateau (Mittelland) and We intend to further increase our production capacities Western Switzerland. across Europe, while promoting renewable energies and enhancing energy effi ciency. In terms of electricity trad- In 2008, the GAH Group won contracts for important ing, we aim to expand the gas business. Nevertheless, in large projects. It was selected to install the cabling for many areas we will feel the effects of the fi nancial crisis the world’s largest offshore wind farm in the North Sea and the economic trend. off Germany. And it is responsible for installing the heliostat fi eld and 60-metre high solar tower at Ger- many’s fi rst solar tower power station. Moreover, the company’s high-voltage overhead line construction activities have been reinforced by the acquisition of FBG- Freileitungsbau GmbH in Germany. Added to that, the Europe-wide investment boom in conventional large power stations has continued unabated.

How severely has volatility in the ﬁ nancial markets affected Trading & Services? For Proprietary Trading, erratic market movements were the order of the day. During the second half of the year, prices dropped as swiftly as they had risen in the ﬁ rst six months. This trend mainly affected the primary energy sources of oil, gas and coal, and subsequently electricity prices as well.

The trading strategy for Asset Trading had to be continually adjusted since this unit, too, had to contend with major price movements and abrupt reversals of direc- 16

Valsesia, Italy

In northern Piedmont, below Monte Rosa and nestled waters of the Sesia are regarded by anglers around the in a deep cleft between the eastern peaks of the Aosta world as the cradle of fl y fi shing. In the winter resort of Valley, sits a forgotten part of Italy. Here the Walser – Alagna, not far from the source, Atel is also harnessing the Vallese population of German origins – once tra- the natural power of these waters. The Gestimi hydro- versed the high mountains and passes and descended in- electric power station, with a capacity of 4 MW, pro- to the Valsesia Valley to farm this harsh alpine region. duces 15 GWh of electricity per year, blending seamless- Woodcutters and cattle farmers from the Rhône Valley ly into the landscape thanks to its typical regional archi- even settled in remote, virtually inaccessible alpine tecture. Further down the valley, in Riva Valdobbia, the meadows, founding villages such as Rimella and Alagna. small recently built Idrovalsesia hydroelectric station The culture and language of the Walser who migrated generates around 13 GWh of electricity per year. Here, here 700 years ago still characterise Valsesia to this day. Atel is committed to sustainably managing the precious But the valley owes its name to the River Sesia, which commodity of water, and in so doing helping to protect fl ows through the alpine landscape before joining the climate and ensure economically viable use of renew- the River Po. Starting out as a glacial torrent, the clear able energies. The small reservoir in the parish of Peccia above Riva Valdobbia is a popular destination for hikers. Naturally embedded in the rugged alpine landscape of Upper Valsesia, it supports the use of water power through a system of light regulation. Ecotourism is also a feature of Varallo, the commercial centre and capital of Upper Valsesia. While Alagna serves as the gateway to one of Europe’s largest ski regions, an extensive network of hiking trails attracts many a visitor to the unspoilt alpine meadows surrounding the villages along the valley fl oor.

Intact ecosystems form the backbone of the alpine landscape in Valsesia. Beech and silver fi r forests give way to larches and rhododendrons. Higher altitudes are home to gentian, lichen and rare species of moss. Underwater, too, this rich diversity of fl ora is sustained at the few quiet inlets along the Sesia. High cliffs, deep gorges and thundering rapids bear witness to the force with which the Sesia rages from the glacier down to the Po Plain. Only further down the valley do kayakers dare to venture onto the river. for Atel’s merger with EOS. A number of additional measures enabled enabled measures additional of number A EOS. with merger Atel’s for Atel to strengthen position its in Europe, demonstrating innovativeness its Alpiq HoldingLtd.comprisesalltheenergypurchase 2009. ThenewcompanywilloperateundertheALPIQ in addressing customer needs andin environmental addressing needs customer issues. In many ways, fi the 2008 the termsoftransactionagreements,EOSHolding the transactionagreementson18December2008,Atel Alpiq – the number one in Switzerland in one number –the Alpiq 22 Highlights of the 2008 2008 the of Highlights Swiss energyprovidergearedtowardsEurope.Under Mission accomplishedattheyearend:havingsigned France, witha25percentstake.EDF’s contributionto will transferitsactivitiesandassetstothenewcom rights relatedtoits50percentstakeintheEmosson renamed AlpiqHoldingLtd.)andanadjustmentpay- and, inreturn,receivesharesAtelHoldingLtd(now brand. Theeventsignalsthecreationofleading of the200-plus announced themergerwithEOSatbeginningof minority shareholdersinAtel(withashareof31per ment. TheprincipalshareholdersofAlpiqareacon- cent each)plusastronginternationalpartner, EDFof New Swisspowerhouse storage powers sortium consistingofEOSHolding,theconsortium tation. Theoperatingunits–virtuallyall subsidiaries andfacilities–willbere- nancial year was dominated by the preparations pany fi nancial nancial year 113 At the113 24 April2008,shareholdersofAtelHoldingLtd(Atel fi to abroadportfolioofenergyservices.Thecompany tion ofCHF218millionintheformareduction Group) votedinfavourofalltheBoardDirectors’ Europe. Asthenumberoneproviderofenergyservices in Switzerland,Alpiqisresponsibleforapproximately one thirdofthenation’s electricitysupplies. employs morethan10,000peoplein29countriesacross land andEurope,withofferings rangingfromelectri- named in2009and2010.AlpiqoperatesacrossSwitzer- of theBoardDirectors’proposalforacapitalreduc- ectors fromliability. Shareholdersalsovotedinfavour proposals. The507shareholderswhoattended(repre- city gener ation, transmission,distributionandtrading senting 94percentofshareholdervotes)approvedthe nancial statementsanddischargedtheBoardofDir- The Neumayer III polar research station in the Antarctic the in station research polar III Neumayer The th AnnualGeneralMeeting th AnnualGeneralMeetingheldinOltenon

© Alfred-Wegener-Institut Atel subsidiaryKraftanlagenHamburgGmbHhaswona zerland. ThisisconsistentwiththeSwissgovernment’s tion totheSwissFederalOf tribution toensuringlong-termenergysecurityinSwit- tion ofthenewnuclearpowerstationinNiederamtwill New nuclear power station for Niederamt, Solothurn Niederamt, for station power nuclear New 23 ing. Moreover, fordecadesAtelhasenjoyed apositive working relationshipwiththelocalauthoritiesand respects. Fromatechnicalstandpoint,itoffers thebest amt, Solothurn.Thisisanideallocationinseveral In June2008,Atelsubmittedagenerallicenceapplica- population. Giventheemergingshortageofelectricity gave shareholdersthebenefi nominal valuefromCHF20to10pershare.This unique contracttodesign,buildandtestafi require broad-basedsupport,Ateliscommittedtose- of newfacilities.Mindfulthefactthatconstruc- replacement ofnuclearpowerstationsorconstruction able energyandenhancingef energy policywhich,inadditiontopromotingrenew- conditions intermsofspace,gridconnectivityandcool- construction ofanewnuclearpowerstationinNieder- curing additionalpartnersforthisproject. distributed in2007. Long-term energysecurity supplies, theAtelprojectwillmakeanimportantcon- Power plantfortheAntarctic fi ce ofEnergy(SFOE)forthe

t ofdoublethedividend ﬁ ciency, providesforthe rst-class unit

© Kernkraftwerk Gösgen-Däniken AG Atel GroupsubsidiaryGAEnergieanlagenbauNord An offshore windfarmcurrentlybeingconstructedin through sensitiveembankment,natureconservation the NorthSeaissettingtwonewrecords:fi the useofspaceatAntarcticstation.ThenewAlfred- GmbH hasbeenawardedthecontracttobuildahigh- Wegener ResearchStationforPolarandOceanic voltage gridconnectionroute.Leadingthecabling Sea coast,itisthemostremoteoffshore windfarm.Sec- Nuclear Test BanTreaty Organisation. international monitoringsystemoftheComprehensive is onasimple,clearlayoutinordertofacilitateservicing ine dieselengines.Inadditiontoreliability, thepriority world’s mostpowerfulwindfarmintermsofcapacity. Research actsasascientifi ondly, eveninitsinitial400MWconfi around 120kilometresdistancefromGermany’s North ling solution.Smallandcompact,theyhelptooptimise also useaninfrasoundmeasuringstationaspartofthe as wellabaseforsummerexpeditions.Thescientists plant withaviewtoextremelyhighavailability. The as farpossible.KraftanlagenHamburgdesignedthe unit ofthesametype:allspecialdesignsbasedonmar- plant consistsofthreedieselenginesandanemergency research stationintheAntarctic.Theunitheatingpower heating powerplantforGermany’s newNeumayerIII meteorology andatmosphericchemistrymeasurements World’s largestoffshore windfarm design ofthewasteheatexchangersisalsoacompel- cobservatoryforgeophysics,

guration, itisthe Foreword Interview Milestones Segments Corporate Social rty at rstly, Responsibility Corporate Governance Addresses and Financial Calendar Atel’s presenceintheNordiccountries,addingFinn- tricity consumption.Thisacquisitionhasexpanded than 20percentofthecountry’s non-residentialelec- tions, wherestate-of-the-artjetdrillingtechniquesare T 24 volume ofaround15TWhperyearrepresentsmore Energieanlagenbau Nordishighlyexperiencedinimple- ish energymarkettoexistingactivitiesinthisregionand industrial andcommercialenterprises.Themanaged Finnish companymanagestheenergyportfoliosoflarge providing aneffective springboardforfurtherexpan- leading independentproviderofportfoliomanagement and energyservices.Withaworkforceofaround60,the necting anoffshore windfarmofmaximumcapacity and eco logically. Thegridconnectionmarksanenergy being usedtoexcavatethesubterraneanductquickly underwater ductbelowtheRiverEmsandatotherloca- pany hascomeupwithaninnovativesolutionforthe and touristregionsposesaspecialchallenge,butGA In May2008,AtelacquiredEnergiakolmioOy, Finland’s milestone: fortheﬁ menting suchprojectsquicklyandecologically. Thecom- city marketafterGermanyandFrance. dimensions tothedomestichigh-voltagegrid. Expansion inScandinavia sion inwhatisthethirdlargestandmostliquidelectri- h e world’s most powerful wind farm wind powerful most e world’s rst timeanenergysupplieriscon-

© Bundesverband WindEnergie e.V. 178 parkingspaces.Thearchitecturefeaturesanun Atel haslaunchedanambitiousprogrammeforthecon- the ecologicaldesignofbuilding,whichusesregen- technik Ltd.(AIT)toinstalltheentirefacilitymanage- Swarovski CorporationcommissionedAtelInstallations- Männedorf onLakeZurichtoaccommodate470work years promptedthedecisiontobuildanewof working worldabetterplace. bined machineforairconditioning.AITisproudtobe new Swarovskibuildingandcanalsobeusedasacom- by LakeZurich:aheatpumpuseslakewatertothe erative energysources,thewaterisobtainedfromnear- administration buildingfortheholdingcompanyin a bywordforspectacularworkscraftedfromprecision- horseshoe designopeningontothelake.TheDaniel In thejewellery, fashionanddesignmarket,Swarovskiis ment systemforelectricalandsanitaryinstallationsin compliance withtheMinergiestandard.Inkeeping cut crystal.ThegrowthenjoyedbySwarovskiinrecent delivering strongservicesandproductsthatmakethe Harnessing lakewaterforSwarovskiHarnessing stations, acanteenandanundergroundgaragewith struction ofnewpowerstationsthroughoutEur Planning anddevelopmentprojects

25 Interview Foreword Segments Milestones Responsibility Addressesand CorporateSocial FinancialCalendar CorporateGovernance

over the next few years. Ten of these projects are same time, the station will switch to using environmen- scheduled to become operational by 2015. In so doing, tally compatible gas. The plant will start generating Atel is expanding its presence systematically and sus- electricity again from the summer of 2009, providing tainably in the European electricity market. Upgrades Atel with future access to its own generation reserves and new builds in countries such as Italy and Switzer- in Germany, too. land are helping to boost and support sales. Atel is also building up a production base in “new” countries, such as France and Germany, with a view to establishing Minimising environmental intervention itself as an important market player in those countries over the long term. In August 2008, the Federal Department of the Environ- ment, Transport, Energy and Communications (DETEC) granted Atel a licence and building permit for the con- Atel electricity from Germany struction of a pumped storage power station in Nant de Drance in Valais. This marks another milestone on the Atel acquired its first generation capacities in Germany way to ensuring a reliable power supply for Switzerland with the purchase of the Spreetal gas-fired combined and for public transport. Construction work on the 600 cycle power station near Cottbus. The relevant agree- MW project started back in September. Then in Novem- ments with the seller, Sustec Schwarze Pumpe GmbH, ber, a construction and operating company was found- were signed in June 2008. Until 2007, the 56 MW ed, in which Atel holds a 60 per cent stake and the Swiss power station, built in 1996, used locally produced syn- Federal Railways (SBB) 40 per cent. The Nant de Drance gas to generate electricity and steam in the steam tur- project utilises the head between the Emosson and bine. Sustec Schwarze Pumpe GmbH, a member of the Vieux Emosson reservoirs to generate peak energy. The Swiss Sustec Beteiligungs Group, discontinued produc- plant will be constructed entirely underground, with action of syngas in 2007 and shut down the power plant cess to the chambers, situated at an altitude of 1,800 temporarily. Upgrades and renovations are scheduled metres above sea level, through a five-kilometre long to last around one year, during which time Atel will tunnel. The large power station will therefore be real- modernise the gas and steam turbine, boilers and burn- ised with minimal impact on the environment. The plant ers as well as the measuring and control systems. At the is scheduled to go into operation in 2015.

Summary of Atel projects Commissioning Atel ownership Atel share of Generation Operating company Technology Country date in % capacity, MW GWh/year

Vetrocom (see p. 26) Wind Bulgary 2010 / 2011 100 50 146

Schwarze Pumpe (see above) Gas CCGT Germany 1997 / 2009 100 55 430

Bayet (see p. 37) Gas CCGT France 2011 100 420 1 550

Moncada (see p. 26, 46) Wind Italy 2011 30 138 390

San Severo (see p. 47) Gas CCGT Italy 2011 60 245 1 600

Ecopower Skandinavia (see p. 48) Small hydro Norway 2014 100 100 475

EcoPower Schweiz (see p. 27) Small hydro Switzerland 2010 100 35 120

Nant de Drance (see above, p. 43) Pumped storage Switzerland 2015 60 377 900

Thermatel (see p. 45) Cogeneration CHP Switzerland 2010 100 60 460 26

Committed to a sustainable future

By developing wind power facilities for electricity generation and adopting innovative approaches to electricity production using drinking water supplies, Atel is doing its bit to help achieve climate targets.

Energy effi ciency enhancement locations in the Alps. The company plans to install 20 generators, with a capacity of 2.5 MW, to achieve an In the Energy Services segment, Atel founded Atel Eco aver age annual gross production volume of 144 GWh: Services AG, a new company specialising in services for roughly ten times the volume of wind power generated energy-effi cient design, planning, construction and op- in Switzerland during 2006. The potential for wind farm eration of buildings and facilities. The portfolio ranges capacity in Bulgaria is approximately 2,200 MW. Sup- from sustainability strategies, energy checks, energy ported by EU legislation, which is aiming to source 11 concepts and sustainable building technology to fi nan- per cent of the energy mix from renewables by 2010 and cing of energy-effi cient facilities, operational optimisa- at least 20 per cent by 2020, Atel intends to signifi cantly tion and technical solutions for facility management. increase the share of renewables in its portfolio. Add- The market potential in this fi eld is substantial, not only itional factors favour this strategy: the Bulgarian gov- for new builds but also for existing facilities. By imple- ernment has undertaken to purchase all the electricity menting so-called lighthouse projects, Atel Eco Services generated and is defi ning advantageous feed-in tariffs AG aims to make an active contribution to enhancing for the production of renewable energies. Together energy effi ciency, while setting an example in initiatives with Romania, Bulgaria represents a future priority to reach government energy targets. Atel has set up this region in Central Europe. new company in response to the Swiss government’s newly aligned energy policy. Over CHF 50 million of venture capital has been invested in the company with the Italian activities stepped up aim of playing a leading role in energy effi ciency enhancement and making a key contribution to reducing Atel has acquired a 30 per cent stake in the Italian

CO2 emissions and achieving climate targets. operations of Moncada Energy Group S.r.l. The initial result of this commitment is a joint venture set up to develop, implement and operate a wind farm. The com- New wind farm project in Bulgaria pany already has an installed wind power capacity of 105 MW, and additional projects with a combined cap- In 2008, Atel expanded its renewable energy portfolio acity of more than 1,000 MW are under development. in Central and Eastern Europe by acquiring all the shares By acquiring this 30 per cent interest, Atel has expand- in Bulgarian wind farm developer Vetrocom Ltd. Vetro- ed its presence in the Italian market and stepped up its com already has experience in the development of wind commitment to renewable energies. Promoting the power facilities and is planning to build a wind farm 200 increased use of renewable energies is part of Atel’s kilometres east of Soﬁ a. With more than 3,000 hours of strategy. At the same time, Atel has set itself the goal wind per year, conditions at the site are among the best of meeting half of the required quotient of “green in Europe, far in excess of those recorded at the prime certiﬁ cates” in Italy with electricity generated by its 27 Interview Foreword Segments Milestones Responsibility Addresses and Corporate Social Social Corporate Financial Calendar Corporate Governance Corporate

own power stations and by acquiring shares in other acity of 1.5 MW. Kraftanlagen München is continuing to power facilities. Atel already holds interests in a number work with partners with a view to optimising the tech- of power stations in Italy, which generate electricity nology, with particular emphasis on further develop- from conventional sources as well as renewable en- ment of the receiver, storage technology and control ergies. Its total installed capacity in Italy is 1,700 MW strategies for all power plant components so as to maxi- spread over 16 facilities, 7 of which are devoted to re- mise the use of solar radiation for power generation. In newables. In 2008, two wind farms with an annual out- future the technology will be used in 10 to 50 MW plants put of 220 GWh went into operation in Sicily. Atel holds in sunny countries around the world. a 49 per cent stake in each. And in northern Italy, Atel has built and is operating the ﬁ rst two small hydroelectric stations in the Piedmont region to harness the power of water there.

Green electricity in the Swiss Alps

Atel EcoPower Ltd., an Atel subsidiary, is involved in an innovative electricity generation project in the Swiss Alps based on drinking water supplies. By utilising a head of 545 metres between the alp above the parish Reisæter of Riein and the reservoir, the drinking water power sta- Sevre Ecopower SK tion offers a practical way of supplementing existing water supplies, while at the same time using the turbine- fed drinking water to deliver the valuable by-product of electrical energy. The mini power station with a cap acity of 15 KW and an annual production volume of 60,000 KWh can supply 15 households with green electricity. EcoPower CH Jülich Weinfelden Isento The plant will go into operation in 2009. Birs Entegra Hagerhüsli/ Cotlan Bätterkinden

EcoPower CH First solar tower power station in Germany Unoenergia Gestimi Idrovalsesia

Following a two-year planning and construction phase, Vetrocom Kraftanlagen München GmbH – a subsidiary of Atel’s GAH Group – completed Germany’s ﬁ rst solar tower power station in Jülich at the end of 2008. The commis- Marineo sioning phase will last until around mid-2009. Kraft- Moncada Ramacca anlagen München acted as general contractor for the innovative installation, which features a 60-metre high tower at its centre. This is surrounded by some 20,000 Atel investments in new renewable energies square metres of sun-tracking mirrors (heliostats) that ■ Small hydroelectric power station focus radiation on a receiver in which air is heated to ■ Wind power around 700° C. The hot air updraft generates steam in a ■ Solar power boiler, which in turn drives a steam turbine with a cap- ■ Development 28

Reisæter, Norway

Vertiginous cliffs, rushing torrents, roaring waterfalls: to careful planning, the unique vegetation in Reisæter, the region around the Hardanger Fjord is preordained with its countless species of moss, junipers, blueberries, for harnessing the power of “blue gold”. And Ecopower birch, alder, foxgloves and ﬂ y agarics, has remained Skandinavia AS does this ecologically and sustainably. intact. This is because the catchment area for both In spring a new small hydroelectric power station, in streams is in the middle of a large national park. A con- which the Atel subsidiary has a stake, came online scious effort was made to involve landowners and in Reisæter. Above the small hamlet on the Sør Fjord, a orchard growers in the project, with the result that they tributary of the Hardanger Fjord, tumble the babbling are now co-owners of the small hydroelectric power brooks of Bleieelva and Strutåni. At an altitude of station. Atel is continually expanding its Norwegian 300 metres above sea level, they collectively generate hydropower portfolio. By 2015, Ecopower Skandinavia around 6 GWh of electricity per year before irrigating AS is aiming to participate in more than 20 small Nor- apple orchards and discharging into the ice-blue fjord. wegian hydroelectric stations, approximately half of Around 500 Norwegian households are supplied with which are to be built around Hardanger Fjord. The to- energy from Reisæter. The electricity is sold on the open tal investment for these sustainable projects amounts market by Atel sales company Energipartner AS. Thanks to CHF 200 million. Norway’s spectacular fjord landscape offers a breathtaking panorama. But that’s not all. This region of jagged mountains and lakes is perfect for generating electricity from the countless tributary streams and rivers. More than half a million fruit trees cling to the steep slopes surrounding Hardanger Fjord. Europe’s northernmost farming region produces ﬂ avour- some, robust apples with a long storage life. The region is extremely fertile: as a renewable source of energy, water is available in abundance whatever the season.

The small hydroelectric power stations on Hardanger Fjord are being planned and built by KraftKarane AS, Atel’s regional partner. David Inge Tveito is project manager of the Reisæter power station. He knows the fjord like the back of his hand, including the extensive ﬁ shing grounds. Johannes Eisenhut, project manager of Ecopower Skandinavia, with his wife Herta during an inspection in Reisæter: good hiking boots and ﬁ tness are a must. But in return, this expert in small hydroelectric power stations and his partner get to enjoy nature at its most beguiling. 34

Energy Segment: Electricity Trading and Sales

Preparations for effective market liberalisation in Switzerland, the implications of market deregulation in Central Europe and the general economic consequences of the fi nancial crisis were the main factors infl uencing our sales and trading business last year. Despite growing competitive pressure and sharp movements in market prices, Atel recorded a successful fi nancial year across all regions. In these increasingly dynamic markets, Atel was able to consolidate and in some areas even expand its position by making additional acquisitions, securing long-term access to gener ation capacity and establishing a new Trading & Services division. 35 Interview Foreword Milestones Segments Responsibility Addresses and Corporate Social Social Corporate Financial Calendar Corporate Governance Corporate

Strong year in a highly dynamic environment

Atel scored successes in all markets despite the initial effects of the global ﬁ nancial crisis. It also capitalised on the opportunities and potential of market liberalisation, both in Switzerland and in the new and old EU member countries.

Market Switzerland in market prices during 2008 were characterised by massive hikes in wholesale prices until late summer, fol- Customer base strengthened lowed by a strong downward shift towards the year end, During 2008, Atel once again recorded higher revenue tracking oil prices. Grid capacity auctions at Switzer- and sales, further strengthening and consolidating the land’s northern border resulted in an increase in prices customer base and energy volumes in its established due to the shortage of import capacities, particularly energy business by winning new customers in the resell- in the winter half-year. er segment. To expand its operations even further and win pilot customers, Atel set up a new business fi eld and Preparations for market liberalisation sales strategy for industrial customers. In this context, Switzerland’s energy industry used 2008 to prepare for Atel also took advantage of an opportunity to acquire effective market liberalisation. In the fi rst phase of de- external energy procurement options. Following a regulation, from 2009 up to and including 2013, large marked upturn in the fi rst half of the year, demand for customers with an annual energy consumption of more electri city trailed off in some areas during the second six than 100 MWh are free to choose their electricity pro- months of 2008. vider. However, despite this freedom of choice, the vast majority of these bulk consumers have so far opted to One notable development was the tendency for whole- remain with their basic service provider on account of sale and reseller prices to drift widely apart. Movements more economically advantageous terms.

Overview Energy segment + / – variance 2007 – 2008 in % 2007 2008 2007 2008 (based on CHF) CHF million CHF million EUR million EUR million

Energy sales (TWh) – 25.2 128.841 96.328 128.841 96.328

Net revenue – 6.9 11 505 10 712 7 002 6 750

EBIT – 5.7 919 867 559 546

as % of net revenue 8.0 8.1 8.0 8.1 Net investments in tangible fixed and intangible assets 202.9 137 415 83 261 Number of employees as of balance sheet date 10.3 1 694 1 869 1 694 1 869 plus trading in standardised products

in TWh – 35.9 220.115 141.191 220.115 141.191

in CHF million or EUR million – 26.8 15 885 11 627 9 668 7 326 36

Energy Segment: Electricity Trading and Sales

Regional developments AEK Energie AG can also look back on a successful 2008 For Società Elettrica Sopracenerina SA (SES), which sup- ﬁ nancial year during which it signed long-term energy plies virtually the entire northern part of the canton of supply agreements with its sales partners and numerous Ticino with electricity, electricity sales, production and SME customers. The pellet business also performed well, revenue for 2008 were within the long-term average. with AEK establishing itself as Switzerland’s leading pro- Developments in southern Switzerland were also inﬂ u- vider of pellet-fuelled contracting facilities. The wood enced by the forthcoming liberalisation of the electricity pellets are produced by the company’s subsidiary, AEK market. The initial phase of liberalisation went off well, Pellet AG, which has doubled its production capacity by with customers remaining loyal to SES. In contrast to expanding the pellet factory in Balsthal. This initiative other regions in Switzerland, most of the communities has allowed the company to further consolidate the AEK in the Sopraceneri entrusted their power requirements Pellets brand and boost its leading market position to SES, a company organised under private law, as far across Switzerland. back as 2007.

SES is now gearing up to defend its position in Ticino’s Market West liberalised electricity market. Among other things, it is stepping up collaboration with Aziende Industriali di Growing competitive pressure Lugano (AIL), the largest supplier of electricity, gas and In the year under review Atel exceeded its sales and water in the Ticino. The company is also promoting profi t targets both in France and Spain. Supported by measures to enhance energy effi ciency and encourage good sales volumes and effi cient portfolio management, the use of renewable energies. sales profi tability improved. This result was achieved in an environment where electricity consumption initially 2008 was also a good year for Atel Versorgungs AG remained stable but dropped off during the fourth (AVAG), with sales and revenue both slightly above quarter. Overall, electricity price volatility increased, target. AVAG set up a joint venture with Städtische with prices peaking in July only to tumble rapidly in the Betriebe Olten (SBO), named Aare Energie AG (a.en), ensuing months. with the aim of building effective market systems and new expertise ahead of the liberalised electricity market. Atel further consolidated its position as one of the main alternatives to established energy suppliers in the region, With support from Atel’s Thermal Production business delivering 10 TWh of electricity to France and 2 TWh to unit, AVAG also carried out a technical upgrade of the Spain. With new contracts for 2009 totalling 13 TWh for Niederamt district heating system. The heat generated both countries, Atel will be able to increase its market from steam produced at the Gösgen nuclear power plant share slightly in the current fi nancial year. Another goal is fed to buildings in Schönenwerd and Niedergösgen. for 2009 is to enlarge and diversify its customer base in The memorandum of understanding with SBO for a the region. shared service building was renewed as well. Market West enjoyed further growth in an environment Three priorities are set to dominate the new fi nancial that saw major changes during 2008. In France, Gaz de year. Topping the list is a programme to streamline France merged with Suez, while E.ON and ENEL entered transmission structures. The second priority is to realign the market, and in Spain ENEL and Acciona were taken the Niederamt remote heating system. Finally AVAG, over by Endesa. The abolition of the high-voltage tariff represented by a.en, intends to set up a joint venture for in Spain opened up growth opportunities, to which marketing and sales with Atel, EBM (Elektra Birseck Atel has already responded by starting up an end-cus- Münchenstein) and EBL (Elektra Baselland). tomer business on the Iberian peninsula. France, on the 37 Interview Foreword Milestones Segments Responsibility Addresses and Corporate Social Social Corporate Financial Calendar Corporate Governance Corporate

Energy procurement 2008 other hand, has extended the validity of the public tar- (excl. speculative transactions) iff for electricity until 2010.

Work was started on the construction of a gas-ﬁ red combined cycle power station in Bayet (Allier) in the Auvergne region of France (see also p. 25). At the same time, the search for a suitable site for a second large power station came to an end with the decision to build in Chevalet, near Arras.

Procurement Generation ■ Purchased ■ New renewables Market Italy (mixed sources) 0.5 % 81 GWh 81.8 % 78,759 GWh ■ Hydraulic Good earnings situation ■ Generated 18.0 % 3,166 GWh 18.2 % 17,568 GWh Atel enjoyed an excellent year in the Italian market des- ■ Nuclear Total 96,327 GWh 32.5 % 5,711 GWh pite the major challenges posed by higher fuel prices, ■ Conventional thermal the high cost of green certifi cates in the fi rst nine 49.0 % 8,610 GWh months and falling prices in the last quarter. As a result, both sales and revenue were slightly down, although earnings were still well above expectation. Growth was Energy sales 2008 recorded in particular by the private and small custom- (excl. speculative transactions) er business fi eld, which exceeded its targets, not least due to a reduction in internal costs and interest rates.

The introduction of energy futures on IDEX, Borsa Ital- iana’s power derivatives market, in November 2008 had a positive impact on the Italian market. Firstly, this has provided an alternative to energy trading based on bilat- eral agreements; and secondly, futures allow greater market transparency, stability and liquidity. ■ Switzerland 8.9 % 8,609 GWh The joint auctions for imports and exports of cross- ■ Western Europe border electricity capacities between Switzerland and 33.6 % 32,334 GWh Italy are breaking new ground. These were ﬁ rst held in ■ Central Europe 22.2 % 21,353 GWh 2008 in the run-up to the liberalisation of the Swiss elec- ■ Trading tricity market, because the shortage of transmission cap- 35.3 % 34,031 GWh acities at the borders makes it impossible to cover the Total 96,327 GWh rise in free-market energy ﬂ ows.

In 2008, further progress was made towards consolidating Atel’s Italian subsidiaries Atel Energia S.p.A. and Energ.it. Having clearly positioned itself in the gas trading sector in 2007, Atel Energia strengthened its presence during the year under review. The company’s new 38

Energy Segment: Electricity Trading and Sales

transport organisation has provided an optimal plat- High volatility is expected to remain a feature of the form for procuring gas and achieving signiﬁ cant savings. Nordic market in 2009. Two other developments will be For 2009, Atel has set itself the goal of further reinfor- the subject of close scrutiny in the near future: the nego- cing Atel Energia’s market position, signing a gas storage tiations between the industry and government with agreement in Italy and trading on the gas exchange for regard to long-term contracts at reduced prices, and the the ﬁ rst time. negotiations between Norway and Sweden on a single electricity market.

Market Nordic Markets North and South (Central Europe) New customer segments, new locations 2008 was a year of mixed results for Atel’s Norwegian Energy price swings subsidiary, Energipartner AS. Income from portfolio In a challenging environment, Atel posted good results management and origination grew continually through- in the Central European Markets North and South. While out the year, whereas revenue from speculative trading Market South profi ted from price trends and recorded dropped sharply in some areas due to the fi nancial crisis. very good year-end results, Market North experienced Energipartner expects to report positive results in 2009. more diffi culties due to the growing risks associated with the raw materials boom and economic crisis. Add- As in 2007, the Scandinavian market was extremely vola- ed to this, the Polish transmission system operator failed tile in the year under review. Having remained consist- to provide its export capacities. Thanks to effi cient ently high throughout the fi rst six months, prices fi nally teamwork and outstanding expertise, Market North fell in the third quarter due to the fi nancial market cri- nevertheless ended the year with satisfactory results. sis. Despite this highly dynamic market, Energipartner recorded good results through a strong performance. Complex integration work had to be tackled in both markets. Prague-based energy trader Entrade is now Strategic priorities fully integrated and operates under the Atel name. The One of the priority areas of Energipartner’s activities integration of Buzmann Industries S.R.L. of Bucharest, during 2008 was expanding business through acquisi- acquired at the end of 2007, is ongoing. In parallel with tions. In Norway the company acquired and integrated this work, Atel started up local operations in Bulgaria, Total Energi ASA, and in Finland Atel purchased the Romania and Bosnia. country’s leading independent energy services provider, Energiakolmio Oy, which Atel successfully integrated in- The overall market trend was very dynamic, which par- to the Nordic business mix. ticularly had a noticeable impact on the end-user markets of Market North and the wholesaling business in Energipartner is increasingly expanding its customer the South. Competition was intensifi ed by the appear- base to include small and medium-sized enterprises be- ance of new market entrants and new wholesale trad- sides its proven large customer segments, and rolled out ing platforms. As a result of the raw materials boom and a new product designed specifi cally for this target group limited generation capacity in the Central European during the year. Two factors played a key role in its suc- market, prices rose sharply in the middle of the year. cessful launch: fi rstly, various departments collaborated Towards the year end, a recession in the market region on its development. And secondly, SME customers were led to a signifi cant fall in industrial production, result- consistently involved in the development process. ing in a decline in energy prices. 39 Interview Foreword Milestones Segments Responsibility Addresses and Corporate Social Social Corporate Financial Calendar Corporate Governance Corporate

Concentration and partnerships fi nancial market crisis was the much higher volatility of The impact of market liberalisation and the fi nancial cri- energy prices, which rocketed in the fi rst half-year and sis were most strongly felt in the end-user market: large fell again in the wake of strong fl uctuations. industries took on more and more risks to optimise purchasing. In the process, Atel lost a few customers. Mean- Atel used the year under review to further expand part- while, medium-sized customers were asking their sup- nerships and alliances, developing the Atel Spreetal and pliers to bear the risks themselves. Against this backdrop Atel Havelland power station sites in Germany in con- Atel focused on the most profi table customer segments junction with Atel Central Generation. With this in mind, and entered into partnerships with sales companies, a 50 MW gas-fi red combined cycle power station was thereby consolidating and expanding its position. acquired in Spreetal. The plant is currently undergoing conversion and is scheduled to come online in the sec- At regulatory level, EU legislation prohibiting prioritisa- ond half of 2009. Atel Havelland has taken out an tion in the allocation of cross-border capacities is now option on a site for a gas-fi red combined cycle power entering the national implementation stage. Atel has station and is now aiming to apply for an operating responded to this by amending or renegotiating its long- permit in accordance with the German Federal Law on term contracts in Hungary, Poland and Slovakia accord- Emissions Protection (BImSchG). ingly. At the same time, it is developing its market position in sales to medium-sized end customers. On the sales front, EGT Energiehandel GmbH continued to consolidate its position as a leading supplier to multi- Atel expects to be faced with a diffi cult environment in site customers. 2009 as the impact of the recession starts to be felt both in the end-consumer market and at individual company Now, much rests on the outcome of political discussions level. Nevertheless, it has set itself the goal of consoli- on the emerging shortage of energy supplies and the dating and expanding its market presence across Cen- construction of new power stations. At present, for ex- tral Europe. Ensuring long-term access to electricity gen- ample, the public debate on emissions from coal-fi red eration capacity and developing a stable end-consumer power stations is impeding the spread of such facilities. portfolio will remain the key factors for success.

Trading & Services Market Germany Highs and lows of the fi rst year in operation Success thanks to long-term, fl exible agreements The new Trading & Services division was established on Atel once again posted positive results in the highly 1 January 2008 in response to the growing importance competitive German market, boosting performance yet of trading. Year one of the new division was marked by again and achieving its targets despite initial indications market volatility, with prices rising steadily in the fi rst six of a slowdown. To strengthen its market position, Atel months only to fall in the second half of the year due to signed long-term agreements and hedged its portfolio the fi nancial market crisis and a decline in demand. Elec- with fl exible contracts. At the same time, it also devel- tricity prices tracked the movements in those for the pri- oped new products based on a thorough analysis of cus- mary energy sources of oil, gas and coal. tomer requirements. Proprietary Trading Nevertheless, the economic effects of the crisis in fi nan- The focus at Proprietary Trading was on building up a cial markets were unavoidable, as Atel witnessed initial competent trader base. In addition to the established signs of a drop in demand. Another consequence of the electricity trading business, the unit primarily concen- 40

Energy Segment: Electricity Trading and Sales

trated on expanding emissions trading in EU allowances addition to power station overhauls, the consequences at European level and in certifi ed emission reductions of market liberalisation made themselves felt in Switzer- (emission certifi cates pursuant to the Kyoto Protocol). land. swissgrid, the national grid company, began to Given the slow progress towards market liberalisation in exert more and more infl uence. At the same time, there Eastern Europe and Italy, Proprietary Trading had little was a growing trend towards monitoring and interven- opportunity to trade on these markets. tion throughout Europe.

In 2009, major importance will be accorded to further While the effective number of electricity traders dropped, expanding the commodity trading business. Strong they behaved in an increasingly similar manner. Market movements in market prices can once more be expected, niches became rarer, and electricity trading was stand- which may impact results. Progress towards market lib- ardised at the Swiss-Italian border. Across Europe the eralisation has a direct infl uence on liquidity while process towards effi cient management of cross-border offering the associated market opportunities. Due to congestion – “market coupling” – appears to be gaining the fi nancial crisis, Atel expects to see an increase in its in importance and winning more support. activities on key exchanges and a corresponding rise in trading volume. By contrast, over-the-counter (OTC) Since liberalised markets require more grid capacity, trading will tend to decline in volume as exchange trans- such management is essential, particularly when grid actions increase. cap acities are in short supply. This is the case at Swiss borders. So in future, extensive market coupling – Key factors for future success will be a professional mar- combined with day-trading options for capacities – will ket and credit risk management system coupled with a exert a decisive infl uence on the operations and inten- modern trading system. Equally important are access to sity of spot trading in electrical energy. Asset Trading liquid markets with a suffi ciently large number of coun- prepared its power stations for liberalisation and locked terparties, as well as specialised know-how on the part in partners. The liberalised Swiss market, its integration of traders. in Europe and ecological issues such as green certifi cates will be key items on the agenda for this year. Asset Trading 2008 saw the emergence of major differences in market In the wake of growing market volatility and transpar- prices for the transport of electrical power between in- ency, risk management and transparent collaboration dividual countries. The habitual directions of electricity within business units will be accorded a high priority. In fl ows were reversed. It was diffi cult to predict develop- future, questions relating to market behaviour and pri- ments, and trading strategies had to be continually cing will be posed more frequently. By the same token, adapted to changing conditions. Major positions had to fi nancial factors such as exchange rate risks, the use of be acquired in annual capacity auctions for electricity venture capital, interest rates and the like will be meticu- transport. lously analysed and measured.

One dominant aspect of the year under review was the Middle Offi ce & Operations unusually high level of congestion, which led to major, Despite numerous changes of a highly dynamic nature, lengthy generation constraints. The reason behind this the 2008 fi nancial year was satisfactory. The main focus was the overhaul work at many of the power stations. In was on preparations for market liberalisation in Switzer- the fi rst quarter of 2008, for instance, the entire Maggia land, introduction of the new Murex trading system in power station was shut down. Moreover, a large number June 2008 and a systematic risk-return portfolio evalu- of transmission system elements were deactivated. In ation as a basis for investment decisions. 41 Interview Foreword Milestones Segments Responsibility Addresses and Corporate Social Social Corporate Financial Calendar Corporate Governance Corporate

A series of factors and developments triggered massive changes in the energy industry environment during the year under review. These included volatility in raw material prices, cash ﬂ ow problems on the part of some business partners and the new auctions introduced by swissgrid for cross-border capacities at Switzerland’s borders. Such dynamic markets call for effective analysis and strong portfolios. To conduct energy transactions swiftly and efﬁ ciently in this rapidly changing environment, system support and the daily nomination of delivery and purchasing schedules are vital.

Although the market coupling of the Benelux states and France may have indicated otherwise, the European wholesale electricity market remained fragmented by country. Switzerland introduced market-compliant auctions at its respective borders. The main factors driving this development were raw material prices and the Inter- nal Energy Market (IEM) of the EU and Switzerland.

Key tasks in 2009 will be driven by the sharper focus on gas business and further harmonisation of the European energy market. As a result, the challenges facing Middle Ofﬁ ce & Operations look set to increase. 42

Energy Segment: Power Generation and Grid

Across all markets, power generation in 2008 was dictated by the rising demand for energy, deregulation and a growing demand for renewable energies, fuelled by the debate on climate change. In addition to wind farm projects, Atel is stepping up expansion of its portfolio of small hydroelectric power stations. Neverthe- less, the market will remain reliant on the use of other energy sources and large power plants in order to meet the growing demand for energy. At Atel the focus is on gas-ﬁ red combined cycle power plants – optimised for energy efﬁ ciency – as well as nuclear power. 43 Interview Foreword Milestones Segments Responsibility Addresses and Corporate Social Social Corporate Financial Calendar Corporate Governance Corporate

Hydro and wind power on a high

In the year under review, Atel’s power generation activities were focused on the use of renewable energies, environmentally compatible, resource- efﬁ cient technologies and new market penetration. Atel Transmission Ltd. successfully won recognition in the liberalised market.

Power Generation Switzerland pumped storage power station in the canton of Valais (see also p. 25). Atel has a 60 per cent interest in the Hydroelectric power: plant, while the remaining 40 per cent is held by the Nant de Drance under construction Swiss Federal Railways (SBB). Negotiations are also in All in all, 2008 was a good year for hydroelectric gener- progress with the canton of Valais for a share of 10 per ation. Following several years of below-average produc- cent. The preconstruction work is already under way. tion, the generation volumes rose once more above the There is little visible evidence of this though, since the long-term average. This is all the more satisfactory since facilities are to be built completely underground. As a facilities in some power plants were at a standstill for result of this non-invasive approach, the impact on the long periods due to major overhauls. environment will be minimal. The power station will have a 600 MW turbine and pump capacity and will util- This positive development was further enhanced by an ise the head between the two existing Emosson and event of historic importance: on 25 August 2008, the Vieux Emosson reservoirs to pump water up during low- Federal Department of the Environment, Transport, demand periods and generate electricity at time of peak Energy and Communications (DETEC) granted Atel a demand. The cost of this construction project is approxi- licence and building permit for the Nant de Drance mately CHF 990 million.

NPP Leibstadt

Ryburg-Schwörstadt Weinfelden Power generation in Switzerland Hagerhüsli/Bätterkinden Klingnau Atel’s own hydroelectric power stations Entegra Isento Interests in hydroelectric joint ventures Birs NPP Gösgen

incl. purchase rights Flumenthal, Atel’s own small hydroelectric Ruppoldingen Winznau and Gösgen power stations Cotlan Interests in small hydroelectric power stations

Interests in thermal joint ventures Zervreila Engadin

Sella Hinterrhein Lucendro Blenio Bitsch

Maggia Martigny Gougra Simplon

20000 15000 10000 5000 2000 1000

0 GWh 44

Energy Segment: Power Generation and Grid

Hydroelectric power stations in Switzerland Power Power Atel share Atel ownership Capacity generation generation Atel share GWh Company in % MW GWh average GWh 2007 / 2008 MW 2007 / 2008

Aarewerke AG 10.1 43 221 230 4 23

Atel Hydro AG* 100.0 96 555 557 87 514

Atel Hydro Ticino SA 100.0 60 100 99 60 99

Blenio Kraftwerke AG 17.0 500 860 917 85 156

Electra-Massa AG 11.5 340 555 634 39 73

Electricité d’Emosson SA 50.0 360 865 782 180 391

Energie Electrique du Simplon SA 1.9 42 239 231 1 4

Engadiner Kraftwerke AG 22.0 410 1 338 1 406 90 309

Kraftwerke Gougra AG** 54.0 159 560 679 103 441

Kraftwerke Hinterrhein AG 9.3 651 1 400 1 593 61 148

Kraftwerk Ryburg-Schwörstadt AG 25.0 110 705 789 28 197

Kraftwerke Zervreila AG 21.6 250 527 593 54 128

Maggia Kraftwerke AG 12.5 626 1 365 1 192 78 149 Total 870 2 632

* Excl. BKW's share in Flumenthal power station ** Energy purchase right of 65%

Thermal power stations in Switzerland Power Power Atel share Atel ownership Capacity generation generation Atel share GWh Company in % MW GWh average GWh 2008 MW 2008

Kernkraftwerk Gösgen-Däniken AG 40.0 970 7 429 7 964 388 3 186

Kernkraftwerk Leibstadt AG 27.4 1 165 8 029 9 307 319 2 550 Total 707 5 736

Small hydroelectric power stations in Switzerland

Power Commissioning/ Atel share Atel ownership Capacity generation acquisition Atel share GWh Company in % MW GWh average date MW 2008

Birs Wasserkraft AG 100 2.1 11.8 2008 2.1 11.8

Cotlan AG 100 0.3 2.3 2008 0.3 2.3

Entegra Wasserkraft AG 75 0.9 2.4 2008 0.7 2.4

Hydro Solar Energie AG 65 1.0 5.2 2008 0.6 3.1

Isento AG 100 1.2 5.1 2008 1.2 5.1

WKW Weinfelden AG 49 1.6 10.0 2008 0.8 4.8 Total 5.7 29.5 45 Interview Foreword Milestones Segments Responsibility Addresses and Corporate Social Social Corporate Financial Calendar Corporate Governance Corporate

The licence and permit signal the end of a lengthy ap- power station will be completed in 2009, with outdated plication procedure for Nant de Drance. Preparations machine parts replaced, and the effi ciency of the entire for licence applications for small hydroelectric power plant being improved. New build projects are planned stations are proving equally time-consuming, despite for the Inn cooperative power station and the Navizence their generally lower capacity. Such work entails inten- plant. Plans are also in place to transport water from sive contacts with the offi cial bodies involved, as well as Lugnez to the Zervreila power plants in order to increase negotiations with the licensing authorities. Atel is electricity generation by up to 100 GWh. Last but not therefore endeavouring to simplify the procedure as far least, Kraftwerke Gougra AG is studying the feasibility as possible. Despite these diffi culties, Atel EcoPower of the Zinal transit project, which will feed the lower Ltd., a wholly owned Atel subsidiary, has taken on glacier water into Lac de Moiry. numerous projects for small hydroelectric power stations. It is currently working on more than 100 add-on Thermal production: and new build projects, not least in view of the associ- plans for a new nuclear power station ated feed-in tariff. With an installed capacity of 5.4 MW, Production at the Gösgen and Leibstadt nuclear power the company’s portfolio of small hydroelectric power stations was below target due to overhaul work lasting stations in Switzerland generates an annual output of longer than scheduled. In addition, maintenance costs around 30 GWh. The portfolio was augmented in 2008 were driven higher due to rising prices for materials. By with the addition of the newly built, small Murkart contrast, the price of uranium on the spot market power station near Frauenfeld. Atel also acquired sig- dropped by around 50 per cent year on year. nifi cant interests in three small hydroelectric power stations in Weinfelden by the River Thur and two facilities Last year’s most important event in connection with in Bätterkinden by the River Emme. thermal gener ation took place on 9 June 2008, when Atel submitted the general licence application for a new Admittedly, the sustained high prices paid for hydro- nuclear power station in Niederamt, canton of Solothurn power have led stakeholder groups to increase their de- (see also p. 23). Progress was also achieved in the area of mands when it comes to granting new licences or com- radioactive waste storage in the year under review. On pensation for reversion waivers. Furthermore, the re- 6 November 2008, the Federal Offi ce of Energy and the vival of hydropower as a renewable energy has also National Cooperative for the Disposal of Radioactive usher ed in a trend towards greater state intervention Waste (NAGRA) announced the locations for deep geo- in hydroelectric operations. Licensing authorities want logical repositories. to have a share of production in return for granting new permits. Added to this, communities and cantons in Work progressed on the Monthey combined heat and po- which such facilities are situated are demanding more wer station Thermatel in the canton of Valais. Monthel market-aligned compensation for production value, as SA, which is responsible for the construction and opera- witnessed by the increase in water rates and new tax- tion of the facility in which Atel is the sole shareholder, ation models for generation facilities. laid the foundation stone at a groundbreaking ceremony on 22 February 2008. Combined heat and power Large range of expansion projects gener ation allows 80 per cent of the fuel energy to be Atel has launched measures to expand and optimise a utilised, with electricity produced as a secondary energy. number of plants in the new fi nancial year, including the With an industrial steam capacity of 43 MW and an elec- renovation of facilities at the Hinterrhein and Bavona trical capacity of 55 MW, this effi cient plant in the Low- power stations. Work on modernising the Flumenthal er Valais region is scheduled to come online in 2009. 46

Energy Segment: Power Generation and Grid

Power Generation West new joint venture, called M & A Rinnovabili S.r.l., will allow Atel to signiﬁ cantly increase production of renew- Growth in renewable energies able energies and build up its overall position in Italy. Taken as a whole, Atel can look back on a successful year The new company covers the Italian wind, solar and in all countries of the region. Without doubt, one of the biomass power facilities already operated or planned by year’s highlights was the acquisition of a 30 per cent Moncada. Moncada has a 5 per cent share of the Italian interest in Moncada Energy Group, one of the largest market and an installed capacity of 105 MW. It is also players in Italy’s market for renewable energies. This planning further projects with a total capacity of 850

Hydroelectric power stations in Italy Power Power Atel share Atel ownership Capacity generation generation Atel share GWh Company in % MW GWh average GWh 2008* MW 2008

Edipower S. p. A., Nucleo di Mese 20 377 1 068 1 193 75 239

Edipower S. p. A., Nucleo di Tusciano 20 96 184 174 19 35

Edipower S. p. A., Nucleo di Udine 20 309 791 956 62 191 Total 156 465

* Excl. production of CIP 6 and mini-hydro facilities

Thermal power stations in Italy Power Atel share Atel ownership Capacity generation Atel share GWh Company in % MW GWh 2008 MW 2008

Atel Centrale Termica Vercelli S. r. l. (ACTV) 95 50 255 50 255

Biella Power S. r. l. 60 20 24 20 24

Edipower S. p. A., Brindisi 20 640 2 702 128 540

Edipower S. p. A., Chivasso 20 1 140 4 819 228 964

Edipower S. p. A., Piacenza 20 860 3 034 172 607

Edipower S. p. A., S. Filippo 20 1 280 3 664 256 733

Edipower S. p. A., Sermide 20 1 140 4 605 228 921

Edipower S. p. A., Turbigo 20 1 780 2 413 356 483

Novel S. p. A. 51 100 612 51 312 Total 1 489 4 839

Small hydroelectric power stations and wind farms in Italy

Power Commissioning / Atel share Atel ownership Capacity generation acquisition Atel share GWh Company / technology in % MW GWh average date MW 2008

Eolica Maridiana S.p.A., Marineo / wind 49 22.1 56 Q1-2009 10.8 –

Eolica Maridiana S.p.A., Ramacca / wind 49 78.5 164 2008 38.5 39.5

M&A Rinnovabili S.r.l. / wind 30 104.6 168 2008 31.5 50.4

Gestimi S.p.A. / small hydro 85 4.0 15 2006 3.4 11.1

Idrovalsesia S.r.l. / small hydro 85 4.6 13 Q1-2009 3.9 – Total 88.1 101.0

3362.indd 46 13.03.2009 11:05:53 47 Interview Foreword Milestones Segments Responsibility Addresses and Corporate Social Social Corporate Financial Calendar Corporate Governance Corporate

Power generation in Italy Nucleo di Mese Atel’s own thermal power stations Gestimi Novel Nucleo di Udine Interests in thermal power stations Valsesia Sermide Interests in hydroelectric power stations Biella Power Interests in wind farms ACTV Turbigo Interests in small hydroelectric power stations Chivasso Piacenza

Nucleo di Tusciano Brindisi

20000 San Filippo del Mela 15000 10000 5000 Marineo 2000 1000 Ramacca 0 M&A Rinnovabili GWh

MW. The partnership is an ideal fi t: in Atel, Moncada has low expectation. While major damage to a gas turbine gained a strong European partner for the distribution of was responsible for lower output at the Biella plant, be- electricity generated from renewable energies, while low-target sales by the Vercelli plant were due to lower Atel has gained a reliable partner for its future invest- steam purchases by its partner Polioli. ments, as well as access to additional technologies for electricity generation based on renewable energies. By contrast, the two combined cycle power stations in San Severo (Italy) and Bayet (France) are going well. Alongside these auspicious developments, Atel also had Atel signed the development, procurement and con- to contend with several challenges in Italy. With the on- struction contracts as well as a long-term service agree- going process of creating a legal framework for “green ment (LTSA) for the two large power station projects. certifi cates”, the price of such certifi cates in Italy de- Financing for the San Severo project has also been clined sooner than planned. This impacted revenue fi nalised. Both power plants are currently under con- from renewable energy projects. The two combined struction and are scheduled to come online in 2010 (San cycle power stations in Biella and Vercelli performed be- Severo) and early 2011 (Bayet). 48

Energy Segment: Power Generation and Grid

Small hydroelectric power stations in Norway

Power Commissioning / Atel share Atel ownership Capacity generation acquisition Atel share GWh Company in % MW GWh average date MW 2008

Sevre Kraftverk AS 36 4.5 16.0 2008 4.5 13.4

Reisæter Kraftverk AS 20 1.5 6.0 Q2-2009 0.3 – Total 4.8 13.4

Finally, Atel celebrated a premiere in Scandinavia in 2008, when the small Norwegian hydroelectric power station in Sevre – the ﬁ rst Scandinavian plant part- owned by Atel – came into operation delivering electricity to the market. Atel plans to acquire and build more small hydroelectric power stations in Norway over the next few years. The energy from small hydroelectric power stations is marketed by Atel’s subsidiary, Energi- partner AS in Oslo.

Power Generation Central

Acquisitions and renovations Atel’s production facilities in Central Europe recorded a highly satisfactory year, meeting all targets without Reisæter

20000 exception. This includes virtually 100 per cent availability 15000 Sevre 10000 5000 2000 of power stations, further development of new facilities, 1000

0 and enhanced proﬁ tability. Another positive develop-

GWh ment in 2008 was the trend in energy prices as well as electricity and heating sales. Only in the last quarter did Power generation in Norway business with several local customers decline, mainly Interests in small hydroelectric power stations due to the credit crisis. Extensive overhaul work in the Czech Republic and Hungary was also performed on schedule and on budget.

Thermal power stations in Hungary and the Czech Republic Power Heat Atel ownership Capacity Capacity generation generation Company in % MWe MWth GWh 2008 TJ 2008*

Csepel I + II, Budapest 100 403 313 2 170 1 072

Kladno Energy Business 100 415 852 1 559 1 137

Zlín Energy Business 100 69 220 214 1 379 Total 887 1 385 3 943 3 588

* Heat output to the heat distribution system only (i.e. excluding heat generated and used for power generation) 49 Interview Foreword Milestones Segments Responsibility Addresses and Corporate Social Social Corporate Financial Calendar Corporate Governance Corporate

Outstanding events in the year under review included million, increasing the power station’s capacity by 14 MW the acquisitions of the Spreetal gas-fi red combined cycle to 403 MW. The improved energy effi ciency now allows power station in Germany and wind farm developer Atel to make signifi cant gas savings. An other highlight Vetrocom in Bulgaria. Atel acquired a 100 per cent inter- was that Atel was able to sign new electricity sales and est in Vetrocom in the autumn of 2008, thereby aug- gas agreements for Csepel. Less pleasing was the Euro- menting its portfolio of renewable energies in Central/ pean Competition Commission’s ruling that the long- Eastern Europe. Vetrocom is planning to build a wind term contracts of certain energy suppliers in Hungary farm 200 kilometres east of Sofi a, with 20 wind gener- (including Csepel II) involved so-called state aid. The ators, each with a capacity of 2.5 MW, and an average Commission is now demanding reimbursement to the gross annual output of 144 GWh. The facility will start state of these putative subsidies, and the government production in 2010. Expansion is also on the cards in Ger- is currently drawing up terms and conditions for calcu- many. In September 2008, Atel purchased the Spreetal I lating these reimbursements. The issue remains a cause gas-fi red combined cycle power station with an installed for concern, but negotiations are continuing. Csepel is capacity of 56 MW. Located near the German city of also taking legal steps to lodge an appeal against the Dresden, the plant has been taken out of operation for EU Commission’s decision with the EU’s Court of First 18 months, during which Atel has been modernising the Instance.

Plans to upgrade the Kladno coal-ﬁ red power station in the Czech Republic for compliance with environmental compatibility standards involved a complex public Kladno Energy Business assessment process spread over the entire year. Atel Zlín Energy Business intends to replace the power station’s outdated components with leading-edge technologies that will increase the plant’s capacity by 101 MW and substantially Csepel I+II improve its efﬁ ciency.

20000 15000 10000 5000 2000 Grid 1000

GWh Successful repositioning The activities of Atel Transmission Ltd. revolved around the new Electricity Supply Act (StromVG) and Electricity Power generation in Hungary and the Czech Republic Atel’s own thermal power stations Supply Ordinance (StromVV), which came into force in 2008 and fundamentally changed the legal framework governing Switzerland’s energy sector. These changes primarily affect the grid and, in particular, transmission gas and steam turbines, boiler, burners and measuring/ systems. Since 1 January 2008, formal responsibility for regulating systems, as well as switching the facility from these systems has been borne by the national grid com- syngas to more environmentally friendly natural gas. pany, swissgrid, to which, by law, ownership of the Spreetal I is scheduled to resume electricity generation transmission system must be transferred by the end of from mid-2009. 2012 at the latest.

In Hungary the focus was on renovation work: the gas In anticipation of this, Atel founded Atel Transmission turbines in Csepel II were overhauled at a cost of CHF 14 Ltd. back in 2001 in order to create the main criteria for 50

Energy Segment: Power Generation and Grid

Atel lines in the high-voltage grid

380 kV 220 kV Atel’s own power lines, interests, long-term rights Limited-duration transmission rights Third parties Upgrading Substations International connections of Atel and partners

meeting the new legal requirements. However, the situ- the head offi ce from Olten to Niedergösgen. Only the ation also called for a number of other adjustments system control centre and members of the central sys- in transmission system management. Successful adjust- tem management group will remain in Olten. ments included the technical upgrading of Atel’s power stations. After passing all the prequalifi cation tests, Lengthy permit procedure nothing now stands in the way of Atel’s participation in On the project side, numerous construction and renova- the Swiss market for balancing energy. tion tasks were on the agenda in 2008. Atel renovated another 8.5 kilometres of the Amsteg–Mettlen line in Atel Transmission Ltd. made signifi cant progress with the canton of Schwyz, but work on renovating other sec- both its strategy and locations in 2008, enhancing its tions has been provisionally blocked due to an appeal profi le as a provider of services for transmission, inter- procedure. The situation is different in Ticino, where regional and railway power systems and expanding its Atel laid a new section of the 220 kV San Joria line in railway and industrial business. Management was also Arbedo, freeing the Ticino community’s development strengthened. These changes also necessitated moving zone from the high-voltage line. A replacement sub- 51 Interview Foreword Milestones Segments Responsibility Addresses and Corporate Social Social Corporate Financial Calendar Corporate Governance Corporate

station was installed on a site in the parish of Kappel, which now boasts a replica of the Klus substation constructed in 2007. Finally, a replacement for the 380 kV / 220 kV facilities in Lavorgo is still in the planning stage. The work has gone well, but it will be virtually impossible to start operations before 2011/2012 due to long delivery times for the main components.

Construction has been impeded by the fact that all overhead line projects in the Valais are increasingly meeting with strong resistance from landscape conservationists. Objections and appeals regularly result in delays in the permit process, and Atel has now launched targeted countermeasures.

Specifi cation of a Châtelard–Rosel line corridor under the sectoral plan for overhead power lines, which entails connection of the Nant de Drance pumped storage power station, gave rise to confl icts between the local and cantonal authorities, on the one hand, and the Fed- eral Commission for the Protection of Nature and Cul- tural Heritage, on the other. This delayed the specifi cation of the corridor by one year. In contrast, Atel has drawn up additional variants for the Airolo-Lavorgo line corridor planning procedure, and an agreement with the Federal Offi ce for the Environment (FOEN) is now in the offi ng. 52

Budapest, Hungary

In Budapest, the water fl ows not only along the Danube, energy requirements and supplies remote heating to but also collects in huge underground thermal water about 20,000 households in southern Budapest. Some chambers. The largest spa pool, situated in a 20-metre 600,000 cubic metres of Danube water are used every day high dome-shaped cave below the city centre, has a to cool down the steam emitted from gigantic turbines. temperature of 27 degrees Celsius. Each day, over 30,000 The water is meticulously cleaned, fi ltered and neutral- cubic metres of water bubble forth from more than ised before it is returned to the river. Atel not only moni- 100 hot springs in the Hungarian capital. Hot pools are tors the quality of the cooling water; it also informs the also a feature of Csepel, an island in the Danube whose inhabitants of Csepel about the air quality via a monitor northern end is part of the Hungarian capital. This is installed on the district’s main square. The Hungarian home to the country’s largest free port and the fi rst Atel subsidiary publishes a detailed annual report on power station in Hungary to be built with private fund- environmental compatibility and sustainability, of which ing. Atel’s modern Csepel II gas-fi red combined cycle it can be justifi ably proud: in 2007, the company received power station covers around six per cent of Hungary’s the prestigious Green Frog Award for this report. Budapest’s famous thermal baths have a long tradition dating back to Roman and Turkish bathing cultures. Relaxing over chess at the spa is also a well- established tradition. Budapest boasts the richest mineralised thermal water sources in Europe. As team leader, Csaba Csarankó is responsible for all operators and technicians who work at Csepel II during his shift. On his rounds, he enjoys an impressive view of the Danube. A little upstream of Budapest sits the picturesque town of Visegrád. This is where Balázs Bene lives. From spring to autumn, the Group Business Director of Atel Csepel gets into his kayak at dawn and paddles for an entire hour: part of his recipe for success. Formerly an uncontrolled dump site, now an idyllic patch of green: “Little Danube Bay” in Csepel. Since 2006 a wooden bridge, co-fi nanced by Atel Csepel, has been providing easy access to the new nature reserve − much to the delight of László Kundráth, electrician at Csepel II and hobby angler. 57 58

Energy Services Segment

Virtually stable prices coupled with the sustained rise in demand for energy-effi cient facilities and buildings once again generated a high order backlog for the AIT Group. Atel Eco Services AG, a specialist in energy effi ciency services established last year and already operating with success, promises to deliver major potential for the Group. Despite the economic downturn, the GAH Group’s business fi elds recorded positive results, driven in particular by strong expansion in its conventional and nuclear power plant technol ogies. The Group also made further strides in high-voltage lines through a strategic acquisition and is now the third-largest provider in Germany. 59 Interview Foreword Foreword Milestones Segments Responsibility Addresses and Corporate Social Corporate Financial Calendar Corporate Governance Corporate

Investment in expansion and consolidation

Despite violent market swings, the Atel Installationstechnik Group (AIT) saw its building technology / facility management and transport technology businesses grow in the year under review. Strong growth was also recorded by the German GAH Group in its two core business ﬁ elds.

AIT Group construction project and is involved in the structural work (50 Hz power supplies) as well as overhead line Still on track for growth installations. Winning this contract underscores the The positive economic situation at the start of 2008 leading role that Atel plays in the Swiss energy services resulted in high order backlogs both in Switzerland and market. The company’s position was additionally in Italy, keeping the Building Services and Transport strengthened through acquisitions in the Swiss plateau Technology units working at high capacity. Only in the (Mittelland) region as well as Western Switzerland. The second half of the year did the unease triggered by the main driver of organic growth within AIT was the tech- ﬁ nancial crisis make itself felt, although this had no im- nical facility management business. pact on incoming orders. While the business environment was subject to major ﬂ uctuations, prices remained AIT also chalked up successes outside Switzerland. With virtually stable, albeit at a slightly lower level than a year the EU investing heavily in public transport in Eastern earlier. Against this backdrop, the Atel Installations- Europe, AIT was able to leverage this development to technik Group (AIT) performed well in the market. grow and strengthen its position, especially in the attractive market for tramlines. In 2009, Atel is planning to con- One of the most important events of the year under tinue expanding its transport technology oper ations in review was the signing of a works contract worth CHF 1.7 the East and West European markets. Through acquisi- billion to install the railway technology in the Gotthard tions, it also gained a foothold for building services in tunnel. The AIT Group is leading this once-in-a-century the Veneto region of Italy.

Overview Energy Services segment + / – variance 2007 – 2008 in % 2007 2008 2007 2008 (based on CHF) CHF million CHF million EUR million EUR million

Order intakes – 4.0 2 400 2 304 1 461 1 452

Net revenue 14.4 1 959 2 242 1 192 1 413

EBIT 56.5 85 133 52 84

as % of net revenue 4.3 5.9 4.3 5.9 Net investments in tangible fixed and intangible assets 31.3 48 63 29 40 Number of employees as of balance sheet date 8.5 7 726 8 383 7 726 8 383 60

Energy Services Segment

AIT Group

General Management

Building Services Transport Technology Special / Large Projects

Atel Gebäude- Atel TB Atel Impianti SA Kummler + Matter AG Atel Infra AG technik AG Romandie SA

Zurich Geneva-Vernier Lugano-Savosa Zurich Zurich

Atel Gebäude- Unifroid SA Atel Sesti S.p.A. Mauerhofer + Atel Eco Services AG technik West AG Zuber SA

Olten Lausanne-Cugy IT-Milan Lausanne-Renens Zurich

Götz AG Atel Antonini S.p.A. Elektroline a.s. Advens AG

Interlaken IT-Verona CZ-Prague Winterthur

Indumo AG GA Fahrleitungs- technik GmbH

Strengelbach DE-Leiferde

In response to the sharp rise in demand for all types Outlook of services to enhance energy effi ciency, Atel designed There is still no clear picture of how the crisis in fi nancial a portfolio of appropriate offerings and set up a sep- markets will impact the construction industry and pub- arate company to manage them. Established in autumn lic spending. Nor is there any clearly identifi able trend 2008, Atel Eco Services specialises in energy effi ciency – in raw material prices. Future conditions in the construc- one of the four pillars of the Federal Council’s energy tion market can, however, be better estimated with policy – and delivers services designed to enhance energy more certainty. As has been predicted for some time, effi ciency in facility management and building technol- AIT expects to see construction activities fl atten off in ogy, helping to reduce CO2 emissions and promote the second half of 2009, triggered by the anticipated sustain able resource management. Atel Eco Services is deterioration in market conditions and a slowdown in set to leverage the growth in demand for such services economic growth. Experience shows that there are also both in new builds and in existing premises, and the opportunities to be exploited in such markets, despite young company has already scored its fi rst successes. any indications of a negative trend. For instance, the 61 Interview Foreword Foreword Milestones Segments Responsibility Addresses and Corporate Social Corporate Financial Calendar Corporate Governance Corporate

Basel Spreitenbach Frauenfeld Liestal Aesch Baden Kloten Winterthur St. Gallen Buchs AG Wallisellen Niedergösgen Aarau Wolfhalden Däniken Zurich Herisau Uster Matzendorf Olten Rothrist Schaan (FL) Strengelbach Buchs SG Solothurn Luterbach Langenthal Grenchen Vaduz (FL) St-Blaise Biel Reussbühl-Luzern Sargans Schönbühl Walenstadt La Chaux-de-Fonds Berne Worb Landquart Niederwangen Chur Fribourg Davos Thun Arosa Cugy Thusis Crissier Interlaken Renens St. Moritz

Bodio

Brig Bellinzona Geneva-Vernier Locarno Martigny Mezzovico Savosa Zermatt Lugano

Mendrisio

AIT Group facilities Atel Installationstechnik (head ofﬁ ce) Facilities

Other facilities outside Switzerland: Ede (NL), Leiferde (DE), Milan (IT), Prague (CZ), Verona (IT)

public sector can be expected to step up capital spend- While Energy Transmission and Communication Technol- ing. Given this situation, the AIT Group’s activities for ogy (ECT) enjoyed stable growth of around 10 per cent, 2009 focus on two objectives: consolidating acquisitions Industrial and Plant Engineering grew by a size able 25 made so far and successfully implementing the Gotthard per cent. railway technology project. The growth enjoyed by Industrial and Plant Engineering was primarily attributable to expansion of conventional GAH Group and nuclear power plant technology, which posted a clear improvement in performance over the previous Robust growth in a diffi cult environment year. Another contributing factor was the industrial In the fi rst quarter of 2008, the German economy per- pipeline and construction business, which benefi ted formed very favourably, only to weaken again in the from high demand from the chemical and petrochemical following two quarters. At the end of the 2008 fi nancial industries in particular. Expansion of European business, year, the global fi nancial crisis also took its toll on the including the acquisition of the OMV oil and gas group German economy, resulting in a pronounced economic in Romania, also drove growth. Energy Transmission downturn. Overall, however, the GAH Group's business Technology enjoyed brisk business, especially in high- fi elds shaped up well despite these diffi cult conditions. voltage overhead line and cable installations – including 62

Energy Services Segment

GAH Group

Industrial and Power Plant Engineering Division Energy Transmission / Communication Technology Division

Kraftanlagen München Caliqua Anlagentechnik GA Energieanlagenbau GA-com Telekommunikation GmbH GmbH Süd GmbH und Telematik GmbH

Munich AT-Vienna Neudorf Fellbach Gifhorn

Kraftanlagen Hamburg Kraftanlagen Romania GA Energieanlagenbau Digi Communication GmbH S. R. L. GmbH Systeme GmbH

Hamburg RO-Bucharest Hohenwarsleben Gifhorn

Kraftanlagen Heidelberg Kraftszer Vállalkozási Kft. Frankenluk Energie- GmbH anlagenbau GmbH

Heidelberg HU-Budapest Bamberg

FINOW Rohrsysteme GmbH GA Hochspannung Leitungsbau GmbH

Eberswalde Walsrode

ECM Ingenieur-Unternehmen Elektro Stiller GmbH für Energie- und Umwelttechnik GmbH Munich Ronnenberg

Ingenieurbüro Kiefer & Voß Martin Bohsung GmbH GmbH

Erlangen Landau

GA Austria GmbH

AT-Alkoven

GA-Magyarország Kft.

HU-Törökbálint

REKS Plzeň s. r. o.

CZ-Plzeň

Energetická montázˇní společnost, Česká Lípa s. r. o.

CZ-Česká Lípa

GA Slovenso s. r. o.

SK-Bratislava 63 Interview Foreword Foreword Milestones Segments Responsibility Addresses and Corporate Social Corporate Financial Calendar Corporate Governance Corporate

power lines connecting offshore wind farms to the grid – stations in the high-voltage range. Conversely, earth- and in transformer stations. bound pipeline construction continued to perform weak- ly. GAH also enjoyed stable demand for cable installa- Having achieved the restructuring objectives of its 2007 tions, railway technology and technical communication consolidation project, the GAH Group made further services. Projects such as electronic interlocking systems, progress in its strategy of concentration, with focus on motorway cabling, radio communication systems for its two core businesses. The 2008 consolidation project public authorities, BWI microwave radio, municipal net- was brought to a successful conclusion with the sale of works and in-house power supply technology opened Kamb, DigiCos Poland and Kraftszer Gebäudetechnik up new market opportunities. To exploit such opportun- as well as the transfer of overhead line construction to ities effectively going forward, ESB, te-com and GA-com the AIT Group. and hence the cable system, railway technology and fi xed-network units were combined under GA-com. In Investment boom for power plants future, the new GA-com will concentrate on the more Large sums of money were invested in the construction profi table and more complex communication technol- of large conventional and nuclear power stations. The ogy business. GAH Group took advantage of this boom to win major large-scale contracts, including the Eemshaven brown Without doubt, one of the highlights of last year was coal power plant in the Netherlands (contract volume: when ECT won a EUR 14 million contract to install cab- EUR 75 million), follow-up orders for the Olkiluoto ling for the Borkum 2 offshore wind farm. This contract 3 power station in Finland (EUR 33 million), Coal Block opens up a promising growth market, and there is a 9 at the large Mannheim AG power station (EUR 31 mil- good chance that more new projects will be secured for lion) and the Mannheim waste incineration power sta- connecting offshore facilities to the grid. In addition to tion (EUR 21 million) in Germany. For environmental contracts to install cabling for a motorway project and reasons, obtaining permits to build coal-fi red power to connect up Berlin-Schönefeld airport (including the stations in Germany may prove increasingly problematic. planning and installation of a tunnel communications system, transmission system, in-house telephone and Niche markets such as biomass incineration power sta- alarm systems), high-voltage projects were another key tions, gas-fi red combined cycle power stations and waste priority. New contracts included the Lahe–Mehrum high- incineration facilities remain in vogue. Demand for main- voltage line in Germany and the reconstruction of a tenance, servicing and dismantling services remains high 400 kV section in Slavetice, Czech Republic, by the Group’s in Germany and Switzerland, and the chemical and petro- Czech subsidiary REKS. chemical industries are enjoying encouraging growth, from which GAH is also reaping the benefi ts. There is still In line with its strategic direction, the GAH Group also market potential to be leveraged with Atel in European consolidated its high-voltage line installation activities, business, for example in Switzerland, Italy, France and taking over FBG-Freileitungsbau GmbH, Walsrode, on Eastern Europe, as well as through alliances with system 1 April 2008 and merging it with the high-voltage units suppliers in indirect export business. (incl. static and ducting) and the HV cabling business fi eld set up in 2008 by GA-Leitungsbau Süd GmbH. Estab- Consolidation in the high-voltage segment lished on 1 January 2009, the new company, GA Hoch- Energy Transmission and Communication Technology spannung Leitungsbau GmbH based in Walsrode, is now (ECT) reported good performance in its overhead line one of the three largest providers of high-voltage over- and cable installation business as well as for switching head line installations in Germany. 64

Energy Services Segment

Demmin

Hamburg

Bremen Eberswalde Bernau Walsrode Gifhorn Berlin Hanover Genthin Ronnenberg Hohenwarsleben Irxleben Kamen Halberstadt Reinsdorf

Essen Dortmund Göttingen Halle Neuss Nünchritz Hilden Dresden Bergheim Korbussen Cologne Erfurt Reichenbach Česká Lípa (CZ)

Koblenz Maintal Frankfurt Bamberg Eppertshausen Erlangen Plzeň (CZ)

Landau Heidelberg Nürnberg Völklingen-Ludweiler Ubstadt-Weiher Bietigheim-Bissingen Bretten-Gölshausen Ilsfeld Ludwigsburg Fellbach Neuhausen Essenbach

Moosinning Alkoven (AT) Aschheim Munich Biberach Burghausen Trossingen Taufkirchen

Innsbruck (AT)

GAH Group facilities Company head ofﬁ ce Branches, ofﬁ ces

Other facilities outside Germany: Bratislava (SK), Brussels (BE), Budapest (HU), Ploieşti (RO), Schwechat / Mannswörth (AT), Törökbálint (HU), Vienna Neudorf (AT) 65 Interview Foreword Foreword Milestones Segments Responsibility Addresses and Corporate Social Corporate Financial Calendar Corporate Governance Corporate

Outlook: opportunities and structural adjustments grid. By the same token, there is a growing need to The GAH Group has taken all the steps necessary to con- invest in the construction of new high-voltage sections tinue capitalising on market opportunities and poten- and to upgrade existing sections along the north-south tial in 2009. With the impact of the fi nancial crisis and its axis, although the fi nancial crisis means that delays in implications for economic growth already becoming implementation are to be expected. apparent towards the end of 2008, economic recession must be regarded as a real possibility in 2009. We expect The goal for the 2009 fi nancial year is to achieve quali- to see a decline in demand from the industrial sector, in tative growth in the GAH Group’s core business fi elds, particular from the automotive and chemical / petro- with emphasis on high voltage – overhead lines, trans- chemical sectors. former stations and cable installations – for Energy Sup- ply and Communication Technology, both within and At present, the political framework is doing little to help outside Germany. Participation in offshore wind farm promote a healthy investment climate. To exacerbate projects (onshore electricity connections), further devel- the reductions in grid transit charges ordered by the opment of cable installations and railway technology, Fed eral Network Agency and the incentive regulation and technical communication services will also increas- system that came into force at the beginning of 2009, ingly contribute to growth in this business fi eld. In the EU Commission’s insistence on unbundling electri- Industrial and Power Plant Engineering, the GAH Group city generation and electricity distribution will have an aims to exploit the potential inherent in the market for increasingly negative impact. Back in November 2008, conventional and nuclear power generation facilities. E.ON announced that it would be drastically cutting Add itional opportunities for growth will be found in back capital expenditure on its distribution network in indus trial plant engineering and pipeline construction, 2009. Vattenfall and E.ON are planning to sell their high- coupled with expansion of European business. voltage systems (transmission and transit systems) so that E.ON can avoid an antitrust dispute with Brussels. Both strategic business fi elds have research and devel- And RWE has announced plans to exit from gas transmis- opment budgets to underpin long-term development. sion operations. Closer collaboration with universities and research centres is planned, together with participation in exist- Despite these less encouraging signs, the GAH Group is ing projects focused on areas such as renewable en- ideally equipped to leverage opportunities and to close- ergies. A model project in this context is the planning ly monitor economic developments so as to make the and construction of Germany’s fi rst solar tower power requisite structural adjustments in good time. There is station in Jülich, on which the GAH Group collaborated still a need to invest in new generation capacities – both with the German Aerospace Center and the Solar Insti- conventional and nuclear. And this demand is even set tute of Aachen University for Applied Sciences. Add- to grow in Eastern Europe and Switzerland, providing itional staff training and further education programmes the associated opportunities for the GAH Group. Efforts are also planned for 2009, along with the recruitment of to promote renewable energy also offer the potential young talent. The GAH Group has implemented meas- for attractive contracts. For example, the planned con- ures to address the fi nancial and economic crisis, and struction of offshore wind farms in the North Sea and to make itself fi t to master the challenges ahead and Baltic Sea will necessitate connections to the electricity exploit emerging opportunities to the full. 66

Val d’Anniviers, Switzerland

High above Val d‘Anniviers lies Lac de Moiry. A soaring At around 10,000 GWh per year, the canton of Valais pro- panorama of 4,000-metre peaks surrounds the reservoir, vides no less than one-ﬁ fth of the electricity consumed in culminating at the end of the valley in the “Emperor’s Switzerland. And Kraftwerke Gougra AG, in which Atel Crown”: the Weisshorn, Zinalrothorn, Obergabelhorn, has a stake, contributes an annual volume of 639 GWh. Bishorn and Dent Blanche. Besides collecting water from The water stored in the Moiry reservoir is channelled the Gougra stream, the reservoir is also a depository for through turbines in three downstream power stations: ice and snow. More water ﬂ owing from the upper Mottec, Vissoie and Chippis. Since water is the most im- Turtmann Valley collects in a reservoir below the glacier portant source of renewable energy and hydroelectric and is pumped into Lac de Moiry. Once the lake is full, generation is regarded as environmentally friendly, Atel the water table is exactly 2,249 metres above sea level. has consistently accorded top priority to hydropower. In Hydro power is an important arm of the economy in addition to storage power stations such as Lac de Moiry, Swiss alpine regions: after all, more than half the elec- Atel’s generation assets also include various run-of-river tricity produced in Switzerland is generated from water. and small hydroelectric power stations. 67

Reservoir keepers Stéphane Naoux (foreground) and Felix Monnet are a committed team, with almost 50 years of professional experience between them. Hydroelectric power from the Valais Alps: Lac de Moiry has a catchment area of some 77 square kilometres and holds 77 million cubic metres of water.

69 Air taxi to work: once a month the two reservoir keepers give the Moiry dam a thorough check-over both inside and out. On their tour inside the dam, they have to climb up and down 1,600 steps. 71

A total of 89 inspection stations have to be visited within three to four hours. All measurements are carried out meticulously, using a range of instruments to check various parameters, such as the angle of the dam and the temperature of the concrete. 72

For a company operating throughout Europe, an inclusive natural approach to social, economic and cultural diversity is one of the keys to sustainable success. Ongoing, transparent dialogue with all stakeholder groups as well as a responsible human resources and social policy are the concrete expression of this approach. Mindful of its obligations towards the community, market and environment, Atel has from the outset engaged in a wide range of projects that promote and enhance mutual understanding and communication between people and cultures. Such involvements provide a sound foundation for a forward-looking energy policy and for Europe. 73 Interview Foreword Foreword Segments Milestones Addresses and Responsibility Corporate Social Corporate Financial Calendar Corporate Governance Corporate

Atel promotes cultural exchange within Europe

When expanding into new markets, Atel consistently honours its social responsibility in those regions. Mindful of this obligation, Atel has supported a pioneering exhibition project to promote understanding between the nations of Eastern and Western Europe.

2008 marked a very special occasion, when around 1,200 A combination of specifi c factors gave rise to this spon- prehistoric objects from some 40 Romanian mu seums sorship of the exhibition of Neolithic culture. For one, left their home country for the fi rst time. Their destin- Atel enjoys a special relationship with Olten, where the ation was the History Museum of Olten, where visitors Romanian Stone Age collection made its fi rst public to the “Stone Age Art – Romanian Neolithic Cultures” debut. Olten has been the seat of Atel since its inception exhibition held between June and November 2008 were more than a hundred years ago, which is why the com- able to view relics that bear witness to a sophisticated pany has traditionally supported and sponsored a wide Stone Age culture: elegant tools, ceramics and jewellery range of public events held in and around this small crafted with high precision. town in Solothurn. From its head offi ce in Olten, Atel has evolved to become a European energy company In addition, the exhibition included an astounding col- that in recent years has also strengthened its presence in lection of sacred artefacts. The artistic highlight was a Eastern and South-Eastern Europe. Hosting a Romanian clay statuette depicting a male fi gure sitting on a stool exhibition on its home turf was not only an extremely with his head in his hands. Because of its strong resem- attractive prospect, but also refl ected the European out- blance to the famous work by August Rodin, it has been look and strong Swiss roots to which Atel is committed. baptised “The Thinker”.

Olten: a cultural crossroads Fostering understanding between East and West This spectacular exhibition at the History Museum of This world premiere in Olten is the result of a visionary Olten featured unique cultural artefacts from the oldest collaboration between a number of institutions and indi- Neolithic culture on the European continent. These pre- viduals. And as the principal sponsor of this successful historic exhibits, from the lower Danube region, date exhibition, Atel played a key role. After all, as a leading from 7000 to 6000 BC. European energy corporation with a traditionally strong presence in various regional markets, Atel is strongly In view of its cultural and historical importance, Swiss committed to fostering understanding between nations. President Pascal Couchepin was only too willing to open It therefore welcomed the initiative for this exhibition the exhibition in person in June, in the presence of many project, which rescued the splendid Stone Age culture political and diplomatic VIPs. The guests were full of of South-Eastern Europe from obscurity and enabled a praise for the “Three Pines City” of Olten, which had cultural exchange of unique dimensions between South- taken on the challenge of staging a major exhibition Eastern and Western Europe. The exhibition was organ- and, in so doing, – as President Couchepin pointed ised under the patronage of the Swiss Federal President, out – proved its status as a cultural crossroads as well the Prime Minister of Romania and UNESCO. as a railway hub. 74

Just one month later, Olten welcomed the entire Federal Active responsibility Council, which visited the exhibition on its traditional and engagement annual outing. The short visit was enough to impress other members of the Swiss cabinet, too. Minister of Economic Affairs Doris Leuthard, for one, announced Conscious of its responsibility towards society and the environ- that she would be returning with her family. In October, ment, Atel accords major importance to sustainable relations with members of the Swiss diplomatic corps in Berne took up customers, partners, shareholders, employees and the community the invitation to Olten, where only a month before the around it. Atel utilises its regional presence throughout Europe to exhibition venue had hosted the fi fth Romanian-Swiss foster dialogue with all stakeholder groups. Archaeology Congress. With this in mind, Atel and EOS have created immergenugstrom.ch, The outstanding response and many requests for guided a new Internet platform for dialogue on Switzerland’s electricity tours prompted the organisers to extend the exhibition future. The platform provides up-to-date unbiased facts and back- for another fi ve weeks. Over a fi ve-month period, visit- ground information on the subject of energy security and addresses ors from Geneva and Lausanne to Vaduz and Müstair, key issues. Aimed at a broad audience, the platform invites online from Romania, Frankfurt and Liebefeld to Salisbury and visitors to take part in a subjective, open and constructive debate London found their way to the Neolithic Art exhibition on energy. to gaze in wonder at the artefacts. The enthusiastic com- ments in the guestbook say it all: “excellently designed In the working environment, quality management and occupation- and highly informative”, “brilliant presentation”, “thor- al safety come fi rst – particularly at facilities that use conventional oughly enjoyable”, and “the exhibition of the year – or technologies. For example, Atel’s thermal power stations in Italy, the decade”. For Atel the exhibition represents the Hungary and the Czech Republic boast state-of-the-art equipment achievement of an important objective: to create a com- and comply with rigorous safety standards. Csepel and the coal- mon understanding across old and new borders, in the fi red power plant in Kladno near Prague have received several fi rm belief that this is the only way to master pressing awards from the UK’s Royal Society for the Prevention of Accidents economic and social challenges. for their high safety and accident prevention standards.

Atel is actively committed to environmentally compatible energy production, sustainable resource management and minimum emission levels. Examples of this commitment include power plants in the Czech Republic and Italy which are certiﬁ ed to the EU environmental management standard (EMAS II), hydroelectric power stations in Switzerland that produce ofﬁ cially approved renewable energy, and the Gösgen nuclear power station, which operates an environmental management system and conforms to the highest safety standards.

Mutual interest and trust characterise the relationship between Atel and its stakeholder groups and form the basis for successful partnerships. The company takes responsibility in many areas of daily life, particularly in the regions where it operates. For years now, Atel has systematically contributed to regional development and quality of life through targeted sponsorship and support for sports clubs, cultural events and social institutions. 75 Interview Foreword Foreword Segments Milestones Addresses and Responsibility Corporate Social Corporate Financial Calendar Corporate Governance Corporate

Transparent remuneration

Atel is committed to remunerating members of management and employees so as to motivate them to help achieve sustainable success for the company. Equally important for Atel is to provide remuneration packages that are transparent and avoid inappropriate incentives.

One of the principles of responsible corporate manage- pares the top 15 energy providers in Europe – Atel tends ment at Atel is to offer competitive salaries coupled to be positioned in the lower quartile of standard mar- with a performance-related and value-based bonus sys- ket remuneration bandwidths. tem that motivates managers and employees to deliver sustainable growth in shareholder value. The Swiss At Atel, executive and employee pay packages consist of Code, from which Atel’s remuneration policy is derived, a ﬁ xed, non-performance-related basic salary and vari- also stipulates that remuneration should be indexed to able, performance-related components. This vari able a corporation’s long-term success and the personal con- pay in turn consists of a short-term component and tribution made by management. a long-term component.

Accordingly, Atel’s remuneration guidelines and bonus The aim of short-term bonus components is to motivate systems take into account the economic situation, results management and provide rewards for performance on of operations and the future outlook for the company. the basis of annual results. To this end, a Nomination The total remuneration packages for members of the and Remuneration Committee appointed by the Board Executive Board and business unit heads therefore con- of Directors determines a nominal fi gure at the start of sist, in equal parts, of fi xed, non-performance-related each fi nancial year. Payment of this amount is dependent components, short-term performance-related bonus on the achievement of up to six personal performance payments and long-term performance-related bonus objectives and on the fi nancial targets achieved. payments spread over several years. All employees in the Energy segment across Switzerland also participate In the interests of sustainable business success, the long- in a similar graded pay system, which will also be adopt- term pay components are offered at all levels as an in- ed by the subsidiaries in future. centive to enhance Atel’s value in the medium and long term. Every year the Nomination and Remuneration Once a year, to ensure that remuneration is commen- Committee defi nes Economic Added Value (EVA) as an surate with standard market rates, Atel commissions an indicator of sustainable growth in shareholder value, independent external consultancy to review the total based on the corporate plans approved by the Atel pay packages of management and employees relative Group. Actual payment is made only three years after to the market environment. This includes an analysis of the long-term components have been assigned. the level and structure of salaries. The last such review was conducted in autumn 2008.

On a like-for-like basis, the positioning of the remuneration components is in line with the market average in the Swiss market. In the European context – which com- 76

Transparent, responsible corporate governance is just as important a factor in sustainable value creation as a comprehensive information policy. Atel operates an effective management and control system in the interests of ensuring a balance between legal and self-regulatory requirements. Combined with clear corporate governance regulations and ethical principles which are trans- lated into practice, they ensure sustain able growth in shareholder value. And at the same time, they address the rising demands of the capital market and the rightful interests of shareholders and stakeholders alike. 77 Interview Foreword Foreword Segments Milestones Responsibility Addresses and Corporate Social Corporate Financial Calendar Corporate Governance Corporate

Atel creates transparency An open information policy, efﬁ cient collaboration based on partnership, and other core values of the Atel culture have proven their worth once more – both in day-to-day business and in paving the way for the merger between Atel and EOS under the Alpiq umbrella.

The principles and rules of corporate governance for The Energy Western Europe division serves its market the Atel Group are set out in the company’s Articles of territory through sales subsidiaries in Italy, France, Spain Association, its Organisational Regulations, the Execu- and the Nordic countries. Atel’s own power stations, its tive Board Regulations, the Group guidelines and the interest in Edipower in Italy and the power station organisational chart, which illustrates the relationships projects across France, Italy and Norway also belong to between affi liated companies. The Board of Directors this division. and Executive Board regularly review these rules and prin ciples, and revise them as and when necessary. The The Energy Central Europe division covers markets in following statements are made in accordance with the Central and Eastern Europe with its sales and trading Corporate Governance Disclosure Guidelines issued by companies in Germany, Poland, Hungary, the Czech the SIX Swiss Exchange. Republic, Slovakia, Slovenia, Croatia, Serbia, Bulgaria, Romania, Macedonia and Greece. These countries come Group structure and shareholders under the responsibility of Atel Energy Ltd. Atel power stations in the Czech Republic and Hungary are man- As an energy company active throughout Europe, Atel aged from Prague, which is also the seat of the Trading Holding Ltd and its operating subsidiaries (Atel Group) business unit for Central / Eastern Europe, part of the have core competences in power generation, electricity Prague subsidiary Atel Česká republika s.r.o. trading and sales, and energy services. The Atel Group has important generation facilities in Switzerland, Italy, The Trading & Services division is active on all major elec- Hungary and the Czech Republic in addition to oper- tricity exchanges in Western Europe, trading in electri- ating its own networks. The Group comprises two seg- city, gas, coal and CO2 certifi cates. ments: Energy and Energy Services. In the Energy segment, Atel combines power generation and transmis- The Energy Services segment delivers services related to all sion operations with trading and sales. The segment is aspects of energy generation, distribution and use. It con- subdivided into the Energy Switzerland, Energy Western sists principally of the companies in Switzerland, Germany, Europe and Energy Central Europe divisions, all of which the Netherlands, Italy and the Czech Republic that belong have their own power stations, affi liated companies and to Atel Installationstechnik Ltd. as well as the companies local sales companies. The Energy segment also includes in Belgium, Germany, Austria, Romania, the Czech Repub- the Trading & Services division. lic and Hungary belonging to the GAH Group in Heidel- berg. The GAH Group provides services in the fi elds of The Energy Switzerland division is responsible for sales energy supply and communications technology as well as in the Swiss market, thermal and hydroelectric power energy technology and industrial plant engineering. Atel generation in Switzerland, and those parts of the Swiss Installationstechnik companies are primarily engaged in electricity grid that belong to Atel. building services and transport technology. 7878

Organisation at 31 December 2008

General Management

G. Leonardi *

Financial Management Services Services

K. Baumgartner * H. Saner *

Energy Energy Energy Trading & Services Energy Switzerland Western Europe Central Europe Services

H. Niklaus * A. M. Taormina * R. Frank * G. Leonardi a. i. * H. Niklaus *

Market Market Market Proprietary AIT Switzerland West North Trading

H. Schranz a. i. P. Hamamdjian Dr. A. Stoltz T. Ramm a. i. P. Limacher

Thermal Power Market Market Asset Trading GAH Generation Italy South

P. Hirt S. Colombo Dr. A. Stoltz T. Ruckstuhl H. Niklaus *

Hydro Power Market Market Middle Office & Generation Nordic Germany Operations

J. Aeberhard A. M. Taormina * Dr. H. Clever Dr. R. Schroeder General management Grid Power Generation Power Generation Fuel Management Functional division West Central Functional unit Business division Dr. M. Zwicky R. Sturani A. Walmsley N. N. Business unit

* Member of the Executive Board

Settlement Accounting & Taxes Treasury & Reporting Insurance Financial D. Christen M. Vögeli G. Giglio L. Oetiker Services

K. Baumgartner Planning & Risk Management IT Controlling

F. Dupertuis W. Hollenstein A. Gebhart

Internal Audit Public Affairs Communications Legal

Management W. Schmucki S. Aeschimann M. Bahnmüller P. Schib Services

H. Saner Development & Human Resources Secretary Organisation Board of Directors

D. Spinnler J. Dali A. Moilliet 79 Interview Foreword Foreword Segments Milestones Responsibility Addresses and Corporate Social Corporate Financial Calendar Corporate Governance Corporate

Financial Services is a Group-level functional division The principal consolidated Group companies are listed in consisting of Accounting & Reporting, IT, Planning & the Financial Report on pages 79 to 85. Signiﬁ cant share- Controlling, Risk Management, Taxes, Treasury & Insur- holders of record are listed in the table on page 80 and ance, and Settlement. The Management Services func- in the Financial Report on pages 56 and 57. tional division includes Human Resources, Legal Services, Corporate Development and Organisation, Public Majority shareholders in Atel Holding Ltd are not re- Affairs, and Communications. Internal Audit and the quired under the Swiss Stock Exchange and Securities General Secretariat are also assigned to this division for Trading Act to take part in a public purchase offer (opt- organisational purposes. ing out). A consortium or shareholder agreement exists between EOS Holding (Lausanne), EDF Alpes Investisse- Stock exchange listing ments Sàrl (EDFAI, Monthey) and the Swiss consortium At 31 December 2008, the parent company Atel Holding of minority shareholders, consisting of EBM (Elektra Ltd (formerly Motor-Columbus Ltd.) domiciled in Olten Birseck, Münchenstein), EBL (Elektra Baselland, Liestal), had a share capital of CHF 218,379,180, divided into the canton of Solothurn, IBAarau, AIL (Aziende Industri- 21,837,918 registered shares with a nominal value of ali di Lugano SA) and WWZ (Wasserwerke Zug AG). The CHF 10 each. The registered shares are listed on the SIX members of the Swiss consortium of minority sharehold- Swiss Exchange under international securities identiﬁ ca- ers are mutually bound by an agreement. tion number ISIN CH0034389707. At the end of 2008, the company’s market capitalisation was CHF 11,683,286,130 The consortium agreement governs the merger of the (calculation: closing price on 31 December 2008 x number Aare-Tessin Group with the operating assets of EOS of shares = CHF 535 x 21,837,918 registered shares). Holding SA and possibly also the Swiss activities of EDF, together with mutual pre-emption rights and corporate On 10 January 2008, following completion of the public governance. exchange offer by Atel Holding Ltd for all shares in Aare- Tessin Ltd. for Electricity (Aare-Tessin Group), the share Cross-shareholdings capital of Atel Holding Ltd was increased from CHF At 31 December 2008, Atel Holding Ltd held 5.0 % of the 255,625,000 to CHF 435,890,800, divided into 21,794,540 share capital of A2A S.p.A. (formerly AEM Milan), which registered shares of CHF 20 each. As compensation for in turn held 6.43 % of the share capital of Atel Holding the cancelled shares in Aare-Tessin Ltd. for Electricity Ltd. Antonio M. Taormina, a member of the Executive (squeeze out), the share capital of Atel Holding Ltd was Board, represents Atel Holding Ltd on the A2A Board of increased on 1 July 2008 to CHF 436,758,360. Aare-Tessin Directors, while Dr. Giuliano Zuccholi, Chairman of the Ltd. for Electricity was delisted from the SIX Swiss Ex- Board of Directors of A2A, represents A2A S.p.A. on the change on 23 June 2008. On 4 July 2008, following the Atel Holding Ltd Board of Directors. Annual General Meeting’s approval of a capital reduction based on a nominal value repayment of CHF 10 per Capital structure share, the share capital was reduced to CHF 218,379,180, divided into 21,837,918 registered shares with a nominal Share capital value of CHF 10 each. At 31 December 2008, the share capital of Atel Holding Ltd amounted to CHF 218,379,180, divided into 21,837,918 Società Elettrica Sopracenerina SA, Locarno, with a share fully paid up registered shares with a nominal value of capital of CHF 27,500,000, of which Atel indirectly holds CHF 10 each. 60.9 %, is also listed on the SIX Swiss Exchange (ISIN CH0004699440). At the end of 2008, the company’s mar- Atel Holding Ltd has additional authorised capital up to ket capitalisation was CHF 11,683 million. a maximum of to CHF 96,901,830. The Board of Directors 8080

is entitled to restrict or disapply shareholders’ pre- Board of Directors at 31 December 2008 emption rights and assign them to third parties, namely when the new shares are to be used in exchange for The Board of Directors is responsible for the overall parts of companies or equity investments or to fi nance guidance and strategic direction of the Atel Group as the acquisition of companies. The Board of Directors well as for supervising the Executive Board. is authorised to set the issue price of the shares and the type of capital contribution. The Board of Directors’ Members of the Board of Directors authority to increase share capital is valid until 7 Novem- The Board of Directors consists of twelve members, none ber 2009. Atel Holding Ltd has no conditional capital. of whom exercises any executive functions within the company. Members of the Board of Directors are listed Changes in equity below and on pages 88 and 89 of this Annual Report. The Statements of Changes in Equity are presented in the Financial Report, on page 14 in the Atel Group’s con- Other activities and interests solidated fi nancial statements and page 92 in the year- Biographical details, professional backgrounds and in- end fi nancial statements of Atel Holding Ltd. State- formation about other activities of members of the ments of Changes in Equity for 2006 can be found in the Board of Directors can be found on the website at 2007 Annual Report of Atel Holding Ltd, on page 12 in reports.alpiq.com / bod. the Atel Group’s consolidated fi nancial statements and page 83 for Atel Holding Ltd. Members are elected to the Board for a three-year term of offi ce and are eligible for re-election. If a member is Shares elected mid-term, he completes his predecessor’s term. Every share represented at the Annual General Meeting of Atel Holding Ltd is entitled to one vote. There are no The Board of Directors constitutes itself. Every year it ap- restrictions on transferability or voting rights. The com- points a Chairman and two Vice Chairmen from among pany has no participation certifi cates, bonus certifi cates its members, as well as a Secretary who need not be a or convertible bonds outstanding. member of the Board.

Shareholders at 31 December 2008

Atel Holding Ltd 23.15 EDFAI

18.56 EOS Holding Percentage interests 18.07 EBM

9.44 EBL

7.42 Canton of Solothurn

6.43 A2A S.p.A.

2.86 EnBW

2.81 AIL

2.65 IBAarau

1.44 Atel

1.21 WWZ

5.95 Various (free ﬂ oat) 81 Interview Foreword Foreword Segments Milestones Responsibility Addresses and Corporate Social Corporate Financial Calendar Corporate Governance Corporate

The Board of Directors met ten times last year, for an Control and supervisory mechanisms average of four hours per meeting. The Chairman determines the agenda for Board meetings after consultation The Executive Board reports annually to the Board of Dir- with the CEO. Any member of the Board may make a ectors on strategic, medium-term and annual objectives written request for a particular item to be included on and on progress towards their achievement. During the the agenda. In advance of meetings, members of the year, the Executive Board reports quarterly and at each Board of Directors receive documentation that enables meeting on the course of business, the progress made in them to prepare for items on the agenda. achieving objectives, and other important developments. The Board of Directors also receives a short Members of the Executive Board normally attend meet- monthly report summarising the key fi nancial fi gures, ings of the Board of Directors in an advisory capacity. the risk situation and ongoing internal audits. They leave the meeting if the Chairman so directs. The external auditors submit a Management Letter to Resolutions of the Board of Directors are passed by a the Board of Directors and make an oral presentation on majority of the voting members present. In the event of the results of their audit and the matters on which they a tie, the Chairman has the casting vote. Should confl icts propose to concentrate in future. Internal Audit submits of interest arise, the relevant Board member(s) must an annual audit programme to the Board of Directors leave the meeting. Minutes are kept of the Board of for its approval, and subsequently reports periodically Directors’ deliberations and resolutions. These are dis- on its fi ndings and recommendations as well as their im- tributed to members and approved at the following plementation. The Board of Directors receives an an nual meeting. Between meetings any member may ask the written report on the situation and developments in CEO for information on the company’s business and, Group-wide risk management and its most important with the Chairman’s authorisation, on individual trans- constituents. The report presents principles and limits, actions. To the extent required for the performance of details compliance with them and contains information his duties, any member may ask the Chairman to arrange on planned expansion. for him to inspect books and fi les.

Board of Directors at 31 December 2008 First elected Term expires Dr. Rainer Schaub, CH-Binningen, Chairman 2006 2009 Christian Wanner, CH-Messen, Vice-Chairman 2006 2009 Marc Boudier, FR-Sèvres, Vice-Chairman 2006 2009 Pierre Aumont, FR-Paris 2007 2010 Dr. Hans Büttiker, CH-Dornach 2006 2009 Dr. Dominique Dreyer, CH-Fribourg 2006 2009 Dr. Marcel Guignard, CH-Aarau 2006 2009 Philippe V. Huet, FR-Paris 2006 2009 Hans E. Schweickardt, CH-Neerach 2006 2009 Dr. Alex Stebler, CH-Nunningen 2006 2009 Urs Steiner, CH-Laufen 2006 2009 Dr. Giuliano Zuccoli, IT-Sesto San Giovanni 2006 2009 8282

Since mid-2006 the Board of Directors has had two employment for the CEO, Executive Board and heads of Board committees: the Audit Committee (AC) and the business units. Nomination and Remuneration Committee (NRC). The NRC submits proposals to the Board of Directors for Audit Committee (AC) its approval and, at each meeting of the Board, reports The AC consists of Marc Boudier (Chairman) and three orally on its activities, resolutions, conclusions and rec- ordinary members: Dr. Dominique Dreyer, Dr. Marcel ommendations. The minutes of the NRC are circulated Guignard and Urs Steiner. among members of the Board of Directors for their information and as a basis for Board resolutions. As a rule, The role of the AC is to support the Board of Directors in the Chairman, CEO and Head of Corporate Human fulfi lling its supervisory obligations, particularly with Resources attend meetings of the NRC. In the year under regard to monitoring and assessing the activity and in- review, the NRC met four times for an average of three dependence of internal and external auditors, the con- hours per meeting. trol system, accounting, risk management, compliance and corporate governance. Division of responsibilities The Board of Directors has delegated responsibility for The AC submits proposals to the Board of Directors for the Atel Group’s overall operational management to its approval and, at each meeting of the Board, reports the CEO. The CEO presides over the Executive Board and orally on its activities, resolutions, conclusions and rec- has delegated some of his management responsibilities ommendations. The minutes of the AC are circulated to members of the Executive Board. The Organisational among members of the Board of Directors for their Regulations and Executive Board Regulations govern information and as a basis for Board resolutions. The AC the authority and division of responsibilities between also submits an annual report to the Board of Directors the Board of Directors and the CEO / Executive Board. summarising the AC’s activities during the year. The CEO is authorised, inter alia, to make autonomous As a rule the Chairman, CEO, CFO and Head of Internal decisions with regard to unbudgeted transactions up Audit attend meetings of the AC. Depending on the to a value of CHF 5 million. Under the Regulations, the agenda, other unit heads and members of the external CEO is granted a substantially higher authority limit for auditors also attend. In the year under review, the AC energy transactions. met three times for an average of three and a half hours per meeting. Information and control mechanisms vis-à-vis the Executive Board Nomination and Remuneration Committee (NRC) The Executive Board keeps the Board of Directors in- The Nomination and Remuneration Committee (NRC) formed of important events on an ongoing basis. Finan- consists of Hans Schweickardt (Chairman) and four or din- cial reports are prepared quarterly. Each month the Board ary members: Marc Boudier, Dr. Hans Büttiker, Dr. Rainer of Directors also receives information on the key fi nancial Schaub and Christian Wanner. fi gures and the current risk situation. Ongoing audits supplement the information and control mechanisms. The role of the NRC is to support the Board of Directors in fulfi lling its supervisory duty with regard to succes- As a rule, members of the Executive Board attend meet- sion planning for the Board of Directors and Executive ings of the Board of Directors to supply any information Board, formulating the Group-wide remuneration pol- it may require. They leave the meeting if the Chairman icy and defi ning the contractual terms and conditions of so directs. 83 Interview Foreword Foreword Segments Milestones Responsibility Addresses and Corporate Social Corporate Financial Calendar Corporate Governance Corporate

Risk management considers business, market and credit Remuneration, shareholdings and loans risks. The Board of Directors receives an annual written report on the situation and developments in Group- Members of the Board of Directors receive a fi xed remu- wide risk management and its most important constitu- neration and a lump-sum expense allowance which is ents. The report presents principles and limits, details based on a graduated scale for the Chairman and other compliance with them, and contains information on Board members. The Chairman of the Board will addition- planned expansion. A central Risk Management Com- ally receive a bonus for 2008; however, it has been decid- mittee reporting to the CFO sets limits for individual ed to stop paying bonuses from the 2009 fi nancial year. areas based on the results of its analysis. The Executive The amount of remuneration is determined by the Board Board is responsible for assigning the risk categories. of Directors at the request of the NRC. The overall limit for the Group is set annually by the Board of Directors. The Risk Management Committee The remuneration of members of the Executive Board monitors adherence to the defi ned limits. consists of a base salary and a variable component based on the achievement of personal targets and the Atel The Board of Directors, at the AC’s request, annually ap- Group’s EBIT in the reporting year as well as the Group’s proves audit planning and the summary report. Corpor- EVA (Economic Value Added) result based on a 3-year ate Internal Audit reports directly to the Chairman of plan. The measurement criteria as well as the amount of the Board. Individual audit reports are submitted to the remuneration for Executive Board members are deter- Chairman and (in summary form) to the AC. Corporate mined by the NRC (for additional details, see page 75). Internal Audit engages an advisor independent of the external auditors for its work. No share award or share option schemes or loans exist for the Board of Directors or Executive Board. Internal control system (ICS) During the year, the Atel Group completed a project Pursuant to Article 663bbis of the Swiss Code of Obliga- to establish an ICS throughout the Group to meet the tions (Transparency Act), details of remuneration for requirements of Art. 728 a of the Swiss Code of Obliga- members of the Board of Directors and the total remu- tions. The ICS ensures that key controls are in place to neration paid to the Executive Board as well as the high- suffi ciently monitor the signifi cant risks associated with est paid member are listed in the Notes to the fi nancial proper preparation of the annual fi nancial statements. statements of Atel Holding Ltd on pages 94 to 97. The ICS has been appropriately documented to allow the auditors to verify its existence. The Board of Directors Shareholders’ participation rights approved the ICS as being commensurate with the size and operations of the business. Every share represented at the Annual General Meeting is entitled to one vote. There are no restrictions on trans- Executive Board ferability or voting rights. The only quotas applicable at the Annual General Meeting are those set out in the The Executive Board consists of six members. These are Swiss Code of Obligations. Annual General Meetings are listed on pages 86 and 87 of this Annual Report. Infor- convened in accordance with the rules set out in the mation about other activities and interests can be found Swiss Code of Obligations. on the website: reports.alpiq.com / management. No management contracts exist. 8484

Agenda Ernst & Young Ltd received fees of approximately CHF 4.7 Shareholders’ participation rights are governed by law million as statutory and Group auditors. Fees paid for and the company’s Articles of Association. The Articles add itional audit-related, tax and general advisory ser- of Association can be downloaded from the website at vices totalled approximately CHF 2.5 million. reports.alpiq.com / statuten. External audit information mechanisms Shareholders may request a particular item to be includ- The Audit Committee (AC) is the supervisory body for ed on the agenda at least 50 days prior to the Annual the external auditors. The external auditors report to General Meeting, provided they represent shares with the AC at least once a year on the audits they have con- a nominal value of at least CHF 1 million. Registered ducted and the resultant fi ndings and recommenda- shares must be entered in the share register at least one tions. The AC agrees the audit plans with the external week before the Annual General Meeting in order for auditors in advance and assesses their work. The exter- holders to be eligible to vote. nal auditors submit a Management Letter to the full Board of Directors once a year. The AC may at any time Change of control and defensive measures invite the external auditors to attend its meetings, and did so on one occasion during the year under review. Mandatory offer Purchasers of majority shareholdings in Atel Holding Ltd Information policy are not required to make a public tender offer pursuant to the Swiss Stock Exchange and Securities Trading Atel keeps its shareholders, potential investors and Act (opting out). The Articles of Association contain no other stakeholder groups informed comprehensively, other defensive measures. promptly and regularly through its annual, interim and quarterly reports, annual media and fi nancial analyst Change-of-control clauses conferences, and Annual General Meetings. Our commu- Directors who step down before their term of offi ce has nication channels also include our continually updated expired in consequence of a change of control are paid website as well as media releases on important events. the fees to which they would be entitled as directors up Contact addresses are provided on page 90 of the Annual to the end of their statutory term of offi ce. Report, and the Financial Calendar on page 91.

The contracts of employment of Executive Board mem- Signifi cant events after the balance sheet date bers contain the usual change-of-control clauses: if a contract of employment is terminated within twelve months The merger of the Atel Group with the assets and activ- of a change of control, the person affected is paid termin- ities of EOS Holding AG as well as EDF’s energy purchase ation benefi ts equal to one year’s remuneration. rights to the Emosson storage power station was completed at the end of January 2009. The associated trans- Auditors action agreements were signed by Atel and EOS Holding as well as the consortium of Swiss minority shareholders Since 2002 Ernst & Young Ltd, Zurich, serve as statutory and EDF on 18 December 2008. The creation of this new auditors of Atel Holding Ltd and as Group auditors. The group named Alpiq entails a number of changes: statutory and Group auditors are appointed by the An- nual General Meeting for a one-year term of offi ce. Their At the Extraordinary General Meeting held by Atel Hold- performance and fees are reviewed annually. Ernst & ing Ltd on 27 January 2009, the company was renamed Young Ltd’s current lead audit partner has been in char- Alpiq Holding Ltd. and the registered offi ce moved from ge of the Atel audit since 2004. In the 2008 fi nancial year, Olten to Neuchatel. The Extraordinary General Meeting 85 Interview Foreword Foreword Segments Milestones Responsibility Addresses and Corporate Social Corporate Financial Calendar Corporate Governance Corporate

also voted in favour of reducing the share capital from Christian Wanner, Vice Chairman and Marc Boudier, Vice- CHF 218,379,180 to CHF 215,236,320 by cancelling Chairman. The renamed Audit and Risk Committee 314,286 registered treasury shares which were held by consists of Marc Boudier, Chairman, and ordinary mem- Aare-Tessin Ltd. for Electricity. The share capital will be re- bers Dr. Jean-Yves Pidoux, Dr. Alex Stebler and Urs Stein- duced by CHF 3,142,860 in May 2009. er. The Nomination and Remuneration Committee consists of Prof. Dr. Guy Mustaki, Chairman, and ordinary On 28 January 2009, the Board of Directors completed members Marc Boudier, Dr. Hans Büttiker and Christian two consecutively approved capital increases in return Wanner. With effect from 1 February 2009, the Board of for a non-cash consideration in the form of the assets Directors also augmented the Executive Board of Alpiq and activities of EOS Holding AG and the energy pur- Holding Ltd. with the appointment of Peter Heydecker, chase rights related to EDF’s 50 % stake in Emosson. The Benoît Revaz and Michael Wider. Additional informa- share capital of Alpiq Holding Ltd. was increased from tion about Alpiq management is published on the Alpiq CHF 218,379,180 to CHF 275,041,590. On completion of website at www.alpiq.com / management. the capital reduction in May 2009, the share capital of Alpiq Holding Ltd. will amount to CHF 271,898,730.

The Extraordinary General Meeting on 27 January 2009 also elected the following new members to the Board of Directors: Guillaume de Forceville (Paris / FR), Claude Lässer (Marly / CH), Daniel Mouchet (Veyrier / CH), Prof. Dr. Guy Mustaki (Pully / CH) and Dr. Jean-Yves Pidoux (Lausanne / CH). At the same time, Dr. Rainer Schaub, Dr. Dominique Dreyer and Dr. Marcel Guignard stood down from the Board. The Board of Directors is now composed as follows: Hans E. Schweickardt, Chairman,

Shareholders in May 2009

Alpiq Holding Ltd. 31.38 EOS Holding

25.00 EDFAI

Percentage interests 13.63 EBM

7.12 EBL

5.60 Canton of Solothurn

5.16 A2A S.p.A.

2.30 EnBW

2.12 AIL

2.00 IBAarau

0.91 WWZ

4.78 Various (free ﬂ oat) 86

Executive Board at 31 December 2008

Giovanni Leonardi Kurt Baumgartner Reinhold Frank CEO Head of Financial Services, CFO Head of Energy Central Europe Dipl. El.-Ing. ETHZ Lic. rer. pol. Dipl. Ing Swiss national Swiss national German national Born 1960 Born 1949 Born 1955 With Atel since 1991, CEO since 2004; With Atel since 1975, member of With Atel since 2006 as member of Chairman of the Board of Directors the Executive Board since 1992; the Executive Board of Società Elettrica Sopracenerina SA, Chairman of the Board of Directors Locarno; of PKE Pensionskasse Energie, Zurich; member of the Board of Directors of member of the Board of Directors of Edipower, Milan, and Romande Rätia Energie AG, Poschiavo, and Energie SA, Montreux AEK Energie AG, Solothurn 87 Interview Foreword Foreword Segments Milestones Responsibility Addresses and Corporate Social Corporate Financial Calendar Corporate Governance Corporate

Herbert Niklaus Heinz Saner Antonio M. Taormina Head of Energy Switzerland Head of Management Services Head of Energy Western Europe and of Energy Services Lic. iur., solicitor and notary Dipl. Math. ETHZ Dipl. El.-Ing. ETHZ Swiss national Swiss and Italian national Swiss national Born 1957 Born 1948 Born 1955 With Atel since 1988, member of With Atel since 1999 as a member With Atel since 1996, member of the Executive Board since 2004 of the Executive Board; the Executive Board since 2005; member of the Board of Directors of member of the Board of Directors of A2A S. p. A., Milan, Rätia Energie AG, Società Elettrica Sopracenerina SA, Poschiavo, and Società Elettrica Locarno Sopracenerina SA, Locarno 88

Board of Directors at 31 December 2008

Dr. Rainer Schaub Christian Wanner Marc Boudier Chairman Vice-Chairman Vice-Chairman Dr. iur. Farmer Dipl. rer. pol. Swiss national Swiss national Master of law French national

Dr. Marcel Guignard Philippe V. Huet Hans E. Schweickardt Member Member Member Lawyer Civil engineer Dipl. Ing. ETHZ Swiss national French national German national 89 Interview Foreword Foreword Segments Milestones Responsibility Addresses and Corporate Social Corporate Financial Calendar Corporate Governance Corporate

Pierre Aumont Dr. Hans Büttiker Dr. Dominique Dreyer Member Member Member Engineer Dr. sc. techn. Attorney French national Dipl. El.-Ing. ETH Swiss national Swiss national

Dr. Alex Stebler Urs Steiner Dr. Giuliano Zuccoli Member Member Member Dr. oec. Energy engineer HTL Electrical engineer Swiss national Swiss national Italian national 9090

Head offi ce Atel Ceská republika, s.r.o. Hungary Romania Alpiq Holding Ltd. Na Přikopĕ 21 Atel Csepeli Áramtermelő Kft. Atel Energy Romania S. R. L. (formerly Atel Holding Ltd) CZ-117 19 Prague 1 Dohány utca 12 Nicolae Caramfi l Street 41 Bahnhofquai 12 Tel. +420 221 720 111 HU-1074 Budapest RO-014142 Bucharest CH-4601 Olten Fax +420 221 720 999 Tel. +36 1 429 1030 Tel. +4021 209 32 85 / 6 Tel. +41 62 286 71 11 www.atel-energy.cz Fax +36 1 268 1536 Fax +4021 209 32 33 Fax +41 62 286 73 73 www.atel-csepel.hu www.alpiq.com ECKG Generating, s.r.o. Buzmann Industries S.R. L. Dubská, Teplárna Atel Energia Kereskedő Kft. Nicolae Caramfi l Street 41 Switzerland P.O. Box 201 Szabadság tér 7 RO-014142 Bucharest Aare-Tessin Ltd. for Electricity CZ-272 01 Kladno 1 HU-1054 Budapest Tel. +4021 209 32 32 Bahnhofquai 12 Tel. +420 312 644 853 Tel. +36 1 886 34 00 Fax +4021 209 32 33 CH-4601 Olten Fax +420 312 644 850 Fax +36 1 886 34 01 www.buzmann.ro Tel. +41 62 286 71 11 www.eckg.cz www.atel-energia.hu Fax +41 62 286 73 73 Serbia www.atel.eu Atel Energetika Zlín s.r.o. Italy Atel Energija d.o.o. tr. Tomase Bati 650 Atel Energia S.p.A. Bulevar Zorana Djindjica 64A Atel Trading CZ-760 01 Zlín Via Montalbino, 3 RS-11070 Belgrade Bahnhofquai 12 Tel. +420 577 521 111 IT-20159 Milan Tel. +41 52 620 15 40* CH-4601 Olten Fax +420 577 523 538 Tel. +39 02 433 351 Tel. +41 62 286 71 11 www.atel-mt.cz Fax +39 02 433 351-66 Slovakia Fax +41 62 286 76 80 www.atel-energia.it Atel Slovensko s.r.o. www.atel-trading.eu Finland Hodzovo nam. 2 Energiakolmio Oy Atel Energia S.p.A. SK-81625 Bratislava Atel Installationstechnik Ltd. Ohjelmakaari 10 Via Vittorio Emanuele Tel. +420 221 720 080 Hohlstrasse 188 FI-40500 Jyväskylä Orlando 75/83 Fax +420 221 720 999 CH-8026 Zurich Tel. +358 20 799 2100 IT-00185 Rome Tel. +41 44 247 40 00 Fax +358 20 799 2102 Tel. +39 06 454 78 61 Slovenia Fax +41 44 247 41 15 www.energiakolmio.fi Fax +39 06 454 78 660 Atel Energija d.o.o. www.group-ait.com Poljanski nasip 6 France Energ.it S.p.A. SI-1000 Ljubljana Austria Atel Energie SAS Via Efi sio Melis, 26 Tel. +386 1 439 87 50 Atel Austria GmbH 8 – 10, rue Villedo IT-09134 Cagliari Fax +386 1 439 10 65 Albertgasse 6/14 FR-75001 Paris Tel. + 39 070 7521 www.atel-energija.si AT-1080 Vienna Tel. +33 1 53 43 84 20 Fax + 39 070 752 151 Tel. +41 52 620 15 40* Fax +33 1 53 43 84 29 www.energ.it Spain www.atel-energie.fr Atel Energia SA Bosnia-Herzegovina Lithuania c / Balmes 89 Atel BH d.o.o. Sarajevo Germany Atel Energy Lietuva UAB ES-08008 Barcelona Mehmeda Spahe 26 Atel Energie AG A. Goštauto 12A Tel. +34 93 45 22 474 BiH-71000 Sarajevo Franz-Rennefeld-Weg 2 LT-01108 Vilnius Fax +34 93 45 22 472 Tel. +41 52 620 15 40* DE-40472 Düsseldorf Tel. +370 5 268 36 53 www.atel-energia.es Tel. +49 211 17 18 06-0 Fax +370 5 268 38 44 Bulgaria Fax +49 211 17 18 06-90 * Business unit contact Atel Bulgaria Ltd. www.atel-energie.de Macedonia in Switzerland 10 Tri Ushi Str., Offi ce 4 Atel Skopje DOOEL BG-1000 Sofi a Atel Energie AG 4-1 Albert Einstein Street Tel. +41 52 620 15 40* Lennéstrasse 1 MK-1000 Skopje DE-10785 Berlin Tel. +389 2 3136530 Vetrocom Ltd. Tel. +49 30 2639 299-0 Fax +389 2 3215470 Georgi Rakovski 130 Fax +49 30 2639 299-90 BG-1000 Sofi a www.atel-energie.de Norway Tel. +359 281 57510 Energipartner AS GAH Anlagentechnik Christian Frederiks plass 6 Croatia Heidelberg GmbH NO-0154 Oslo Atel Hrvatska d.o.o. Im Breitspiel 7 Tel. +47 22 81 47 00 Vijenac Tuskanac 7 DE-69126 Heidelberg Fax +47 22 81 47 01 HR-10000 Zagreb Tel. +49 62 21 94 10 www.energipartner.no Tel. +41 52 620 15 40* Fax +49 62 21 94 25 48 www.gah-gruppe.de Poland Czech Republic Atel Polska Sp. z o.o. Atel CZ, s.r.o. Greece al. Armii Ludowej 26 Husova 5 Atel Hellas S.A. PL-00-609 Warsaw CZ-110 00 Prague 1 Karystou 5 Tel. +48 22 579 65 25 Tel. +420 224 401 124 GR-115 23 Athens Fax +48 22 579 65 27 Fax +420 224 401 541 Tel. +30 210 6996 201 www.atel-polska.pl Fax +30 210 6998 202 91 Interview Foreword Foreword Segments Milestones Responsibility Addresses and Corporate Social Corporate Financial Calendar Corporate Governance Corporate

Financial calendar Units

23 April 2009 Annual General Meeting Currency May 2009 Quarterly results 1 / 2009 BGN Bulgarian lev August 2009 Interim Report CHF Swiss franc November 2009 Quarterly results 3 / 2009 CZK Czech koruna February 2010 Release of 2009 annual results DKK Danish krone 17 March 2010 Annual media conference EUR Euro 22 April 2010 Annual General Meeting HRK Croatian kuna HUF Hungarian forint LTL Lithuanian litas MKD Macedonian denar NOK Norwegian krone PLN Polish zloty RON Romanian new lei RSD Serbian dinar SEK Swedish krona SKK Slovakian koruna USD US dollar

th. thousand mn. million bn. billion

Energy kWh kilowatt hour MWh megawatt hour (1 MWh = 1000 kWh) GWh gigawatt hour (1 GWh = 1 million kWh) TWh terawatt hour (1 TWh = 1 billion kWh) TJ terajoule (1 TJ = 0.2778 GWh)

Power kW kilowatt (1 kW = 1000 watts) MW megawatt (1 MW = 1000 kilowatts) GW gigawatt (1 GW = 1 000 000 megawatts) MWe electrical megawatts MWth thermal megawatts

Contacts

Investor Relations Kurt Baumgartner, CFO Tel. +41 62 286 71 11 Fax +41 62 286 76 67 [email protected]

Corporate Communications Martin Bahnmüller Tel. +41 62 286 71 10 Fax +41 62 286 76 69 [email protected] 92

Published by Alpiq Holding Ltd. (formerly Atel Holding Ltd)

Design and text Prime, Zurich

Photos Michael Sieber, Zurich

Printing Dietschi Print & Medien AG, Olten

The Annual Report 2008 is published in German, English, French and Italian. The Financial Report 2008 is published in German and English. The German original text is authoritative. As a leading energy services provider operating throughout Europe, Atel generates, trades and sells electricity, and also provides a broad range of energy services cov- ering all aspects of energy and its applications.

Subsidiaries and branches Energy segment Energy Services segment Power generation Electricity sales and trading (exchanges / OTC market) Energy is our business

Annual Report 2008

Alpiq Holding Ltd. (formerly Atel Holding Ltd) Bahnhofquai 12 CH-4601 Olten Tel. +41 62 286 71 11 Fax +41 62 286 73 73 www.alpiq.com Atel Group Annual Report 2008 Energy is our business

Annual Report 2008

Alpiq Holding Ltd. (formerly Atel Holding Ltd) Bahnhofquai 12 CH-4601 Olten Tel. +41 62 286 71 11 Fax +41 62 286 73 73 www.alpiq.com Atel Group Annual Report 2008